4. Millie manufactures potteries which requires renting a workshop at AED 30,000 per monthand hiring a pottery oven at AED 10,000 per month. Her variable cost per month is givenin the table below;Quantity of potteries Variable cost per month (AED)0050010001500200025003000350040005,0008,0009,00014,00020,00034,00050,00072,000(a) Calculate Millie's average variable cost, average total cost and marginal cost for eachquantity of output.(b) In the same graph, draw Millie's Marginal Cost curve, Average Variable Cost curve,Average Fixed Cost curve, and Average Total Cost curve.(c) What can you say about the average total costs in the long run compared to thosedrawn in 4b?(d) Describe the shape of the average total cost curve. What factors contribute to thisshape? Explain how these factors play a role.

Fixed Cost refer to those costs which are independent of the level of output whereas variable costs…

4. Millie manufactures potteries which requires renting a workshop at AED 30,000 per month and hiring a pottery oven at AED 10,000 per month. Her variable cost per month is given in the table below; Quantity of potteries Variable cost per month (AED) 0 0 500 5,000 1000 8,000 1500 9,000 2000 14,000 2500 20,000 3000 34,000 3500 50,000 4000 72,000

4. Millie manufactures potteries which requires renting a workshop at AED 30,000 per month and hiring a pottery oven at AED 10,000 per month. Her variable cost per month is given in the table below; Quantity of potteries Variable cost per month (AED) 0 0 500 5,000 1000 8,000 1500 9,000 2000 14,000 2500 20,000 3000 34,000 3500 50,000 4000 72,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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