Question

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4. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the company's total cost of production at various production quantities Fill in the remaining cells of the following table Quantity Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Pairs) (Dolars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 120 210 270 315 380 475 630 90 60 45 65 95 155 120 120 120 120 120 120 120 90 150 195 260 355 510 90 75 65 65 71 85 210 135 105 95 95 105 2 4

Answer 1

Fixed cost is the cost at zero level of output. It remains fixed or same at each level of output.

Marginal cost = Change in total cost / Change in quantity

Total variable cost = Total cost - Fixed cost

Average variable cost = Total variable cost / Quantity

Average total cost = Total cost / Quantity

Table is correctly filled.

Graph is correct except MC curve.

240 T ATC 150 AVC 120 MC ー90 60