560 and total variable costs as indicated in the table. Complete the table and check your calculations by referring to problem 4 a iable cost, and total cost. Explain how the law of diminishing retums influences the shapes of the variable-cost and total-cost curves. MC. Explain the derivation and shape of each of these four curves and their relationships to one another. Specifically, explain in n ects both the AVC and the ATC curves at their minimum points. ch curve graphed in question 3b would be altered if (1) total fixed cost is $100 rather than S60 and (2) total variable cost is S10 less a Total Marginal Cost Total Total Total Product Average Fixed Cost Average Variable Cost Average Total Cost Fixed Cost Varlable Cost Cost $ 0 45 2 85 3 120 4 150 185 225 7. 270 8. 325 390 10 465
560 and total variable costs as indicated in the table. Complete the table and check your calculations by referring to problem 4 a iable cost, and total cost. Explain how the law of diminishing retums influences the shapes of the variable-cost and total-cost curves. MC. Explain the derivation and shape of each of these four curves and their relationships to one another. Specifically, explain in n ects both the AVC and the ATC curves at their minimum points. ch curve graphed in question 3b would be altered if (1) total fixed cost is $100 rather than S60 and (2) total variable cost is S10 less a Total Marginal Cost Total Total Total Product Average Fixed Cost Average Variable Cost Average Total Cost Fixed Cost Varlable Cost Cost $ 0 45 2 85 3 120 4 150 185 225 7. 270 8. 325 390 10 465
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 4.10P
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i need in words not handwritten
Transcribed Image Text:3. A firm has a total fixed cost of $60 and total variable costs as indicated in the table. Complete the table and check your calculations by referring to problem 4 at the end of
a. Graph total fixed cost, total variable cost, and total cost. Explain how the law of diminishing returns influences the shapes of the variable-cost and total-cost curves.
b. Graph AFC, AVC, ATC, and MC. Explain the derivation and shape of each of these four curves and their relationships to one another. Specifically, explain in nontechnical
terms why the MC curve intersects both the AVC and the ATC curves at their minimum points.
c. Explain how the location of each curve graphed in question 3b would be altered if (1) total fixed cost is $100 rather than $60 and (2) total variable cost is $10 less at each level
of output.
Total
Total
Total
Total
Average
Fixed Cost
Average
Variable Cost
Average
Marginal
Product
Fixed Cost
Variable Cost
Cost
Total Cost
Cost
24
$ 0
1
45
85
120
150
5
185
225
7
270
8.
325
390
10
465
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