Marginal, Average and Total Cost
A firm's cost curves are given as follows:
|
Rate of Output |
Fixed Cost |
Variable Cost |
Total Cost |
Marginal Cost |
Average Fixed Cost |
Average Variable Cost |
Average Total Cost |
|
(FC) |
(VC) |
(TC) |
(MC) |
(AFC) |
(AVC) |
(ATC) | |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) | |
|
0 |
50 |
0 |
|||||
|
1 |
50 |
50 |
|||||
|
2 |
50 |
78 |
|||||
|
3 |
50 |
98 |
|||||
|
4 |
50 |
112 |
|||||
|
5 |
50 |
130 |
|||||
|
6 |
50 |
150 |
|||||
|
7 |
50 |
175 |
|||||
|
8 |
50 |
204 |
|||||
|
9 |
50 |
242 |
|||||
|
10 |
50 |
300 |
|||||
|
11 |
50 _ |
385 |
a. Complete the table
b. Draw the graphs to illustrate the AVC, ATC, and the MC. Is there any relationship between the MC and the AVC? Between MC and the ATC?
c. Given the price of the market as $42, what will be the profit maximizing output for this firm?
d. At what price will this firm break even?
e. At what price will this firm shut down?
f. Derive the supply curve of this firm.
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