Answered: 4. Various measures of cost Suppose the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Transcribed Image Text:# Various Measures of Cost Suppose the imaginary company of Panthera is a small, Reno-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities. **Fill in the remaining cells of the following table.** | Quantity (Pairs) | Total Cost (Dollars) | Marginal Cost (Dollars) | Fixed Cost (Dollars) | Variable Cost (Dollars) | Average Variable Cost (Dollars per pair) | Average Total Cost (Dollars per pair) | | ---------------- | ---------------------- | ------------------------- | --------------------- | ------------------------ | ------------------------------------------- | --------------------------------------- | | 0 | 60 | | | | | | | 1 | 160 | | | | | | | 2 | 220 | | | | | | | 3 | 270 | | | | | | | 4 | 340 | | | | | | | 5 | 450 | | | | | | | 6 | 630 | | | | | | --- **Graph Explanation:** - Plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). - Plot its average variable cost (AVC) curve using the purple points (diamond symbol). - Plot its marginal cost (MC) curve using the orange points (square symbol). **Hints for Plotting:** - **ATC and AVC**: Plot the points on the integer; for example, if producing one pair of boots costs $160, start the ATC curve at (1, 160) with a green point. - **MC**: Plot the points between the integers; for example, if increasing production from zero to one pair costs $100, start the MC curve at (0.5, 100) with an orange square. **Note:** Plot the points in the order in which you would like them connected. Line segments will connect the points automatically.

On the following graph, you will plot Douglas Fur's cost curves:

1. **Average Total Cost (ATC)**:
- Use green points (triangle symbol).
- Example: If the ATC of producing one pair of boots is $160, place a green point at (1, 160).

2. **Average Variable Cost (AVC)**:
- Use purple points (diamond symbol).

3. **Marginal Cost (MC)**:
- Use orange points (square symbol).
- Plot these points between integers. For example, if the MC for increasing production from zero to one pair is $100, place an orange square at (0.5, 100).

**Graph Details**:
- **Axes**:
- **Horizontal Axis (X-axis)**: Quantity (Pairs of boots) from 0 to 6.
- **Vertical Axis (Y-axis)**: Costs (Dollars per pair) ranging from 0 to 200.

- **Legend**: Indicates the symbols for each curve:
- Green triangle for ATC.
- Purple diamond for AVC.
- Orange square for MC.

**Instructions**:
- Plot your points in the desired order for connecting them with line segments.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions