Answered: Fill in the remaining cells of the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Various measures of cost

Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the company’s total cost of production at various production quantities.

IMG 1

On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $155, so you should start your ATC curve by placing a green point at (1, 155). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $95, so you should start your MC curve by placing an orange square at (0.5, 95).)

Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

IMG 2

Fill in the remaining cells of the following table.
Quantity
Total Cost
Marginal Cost
Fixed Cost
Variable Cost
Average Variable Cost
Average Total Cost
(Pairs)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
(Dollars per pair)
(Dollars per pair)
60
155
220
3
255
4
300
350
450
LO

200
175
ATC
150
125
AVC
100
MC
75
50
25
+
3
4
5
6.
QUANTITY (Pairs of boots)
COSTS (Dollars per pair)

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