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The tot al costs for Morris Industries are summarized in the following table. (2 (3 4) FCİVCÍTC 0 10 20 30 40 | | | 4,000 50-1 60 1,000 2.000 2,500 6.000 )10,000 15,000 i. Based on this information, fill in the missing entries in the table for fixed cost, variable cost, average fixed cost, average variable cost, average total cost, and marginal cost.
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Answer #1

The table is provided below. Fixed cost = total cost at Q = 0 is 1000. Variable cost = TC - FC.

Output Fixed cost Variable cost Total cost Average Total cost Average fixed cost Average variable cost Marginal cost
0 1000 0 1000
10 1000 1000 2000 200.0 100.0 100.0 100.0
20 1000 1500 2500 125.0 50.0 75.0 50.0
30 1000 3000 4000 133.3 33.3 100.0 150.0
40 1000 5000 6000 150.0 25.0 125.0 200.0
50 1000 9000 10000 200.0 20.0 180.0 400.0
60 1000 14000 15000 250.0 16.7 233.3 500.0

Marginal Cost is the first derivative of the total cost with respect to the output. It is given by Change in TC/Change in Q Average variable cost is defined as variable cost per unit of output produced. It is given by VC/Q Average fixed cost: It is defined as fixed cost per unit of output produced. It is given by AFC/Q Variable cost varies with the level of output. It is the difference between total cost and fixed cost Average total cost: It is the total cost divided by the number of units produced. It is given by TC/Q Fixed cost of production is the unrelated to the level of production. This cost does not change with the level of output since it has to be paid whether the firm operates or not. Total cost of producing a unit of product is the sum of fixed cost and variable cost of producing that unit.Total cost is composed of both fixed cost and variable cost Profit accrue to the firm if its total revenue exceeds the total cost Total revenue implies the product of price charged and quantity sold.

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