Question

AP an Carrumar Choice and Coats Name: 01. For the graph bew, calculate the following cream = 20 P MC ATC su AVC $2.50 a 1. ATC or ACE 6 ARC d. FC ETC 02. Frodorus Frue store with a production function represented by the first calm af the following table. Frodo pays each worker $20 and the cost of his other variable inpuls raw materiali 52.60 percup of yogurt. His five cabane S10Fil in the bences in the following tahle. Show your cakulations ca the next pe Labor Output Fixed Variable Total Marginal Average (L) (0) Costs Coats (VC) Costs Co (MC) Costs (AC) (Cups of (FC) (TC) Yogurt 0 0 NA NA 110 2 2000 3 270 4 300 330

Answer 1

1. Answer: When Q=20

a. AVC= $7.50

b. ATC or AC = $8

c. AFC = ATC-AVC = $8- $7.50 = $ 0.50

d. FC = AFC*Q = $0.50 * 20 = 10

e. TC = FC+TVC

TVC= AVC*Q = $7.50*20 = 150

TC= 10+150 = 160

2.

Labor	Output (Q) (Cups of Yogurt)	Fixed costs (FC)	variable costs (VC)	Total cost (TC)	Marginal Cost (MC)	Average cost (AC)
0	0	$100	0	$100	N/A	N/A
1	110	$100	$110	$210	110	210
2	200	$100	$100	$200	-10	100
3	270	$100	$90	$190	-10	63.33
4	300	$100	$75	$175	-15	43.75
5	320	$100	$64	$164	-10	33
6	330	$100	$55	$155	-10	25.83

Fixed Cost is given = $100

VC = output/ unit of labor

TC= FC+VC

MC= TCn - TCn-1

AC= TC/Q