1. *Understanding costs: Fill in the gaps in the following table, and then draw on a diagram the marginal cost, average variable and average total cost curves: Total Total Total Marginal Output Fixed Variable Cost Cost Average Fixed Cost Cost Cost Average Variable Cost Average Total Cost 0 100 1 125 2 145 3 157 4 177 5 202 6 236 7 270 8 326 9 398 10 490

1. *Understanding costs: Fill in the gaps in the following table, and then draw on a diagram the marginal cost, average variable and average total cost curves: Total Total Total Marginal Output Fixed Variable Cost Cost Average Fixed Cost Cost Cost Average Variable Cost Average Total Cost 0 100 1 125 2 145 3 157 4 177 5 202 6 236 7 270 8 326 9 398 10 490

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 32CTQ: How does fixed cost affect marginal cost? Why is this relationship important?

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