Question

The cost structure of a manufacturer of microchips is described in the table shown below.

The​ firm's fixed costs equal ​$25​,000 per day. Calculate the average variable cost​, average fixed cost​, and average total cost at each output level.

​(Your answers should be rounded to the nearest cent.​)

output (microchips per day)	total cost of the output	average variable cost	average fixed cost	average total cost
0	25,000	-	-	-
25,000	75,000
50,000	110,000
75,000	165,000
100,000	235,000
125,000	340,000
150,000	480,000

Answer 1

Answer:

Variable Cost (VC)= Total Cost (TC) - Fixed Cost((FC)

Average Variable Cost(AVC) = AVC / Q

Average Fixed Cost(AFC) = FC / Q

Average Total Cost(ATC) = TC / Q

Output(Q)	Total Cost(TC)	Fixed Cost(FC)	Variable Cost(VC) = TC - FC	Average Variable Cost(AVC) = AVC / Q	Average Fixed Cost(AFC) = FC / Q	Average Total Cost(ATC) = TC / Q
0	25,000	25,000	0	-	-	-
25,000	75,000	25,000	50,000	2	1	3
50,000	110,000	25,000	85,000	1.7	0.5	2.2
75,000	165,000	25,000	140,000	1.87	0.33	2.2
100,000	235,000	25,000	210,000	2.1	0.25	2.35
125,000	340,000	25,000	315,000	2.52	0.2	2.72
150,000	480,000	25,000	455,000	3.03	0.17	3.2