Megan’s Snow Shoveling Service, in which Megan is the only employee, has the following cost schedule. Quantity (sidewalks shoveled per day) Variable Cost Total Cost AVC ATC MC 0 $0 $30 - - - 1 10 40 2 25 55 3 45 75 4 70 100 5 100 130 6 135 165 Calculate average variable cost, average total cost, and marginal cost for each quantity and graph all three curves.
Megan’s Snow Shoveling Service, in which Megan is the only employee, has the following cost schedule.
|
Quantity |
Variable Cost |
Total Cost |
AVC |
|
|
|
0 |
$0 |
$30 |
- |
- |
- |
|
1 |
10 |
40 |
|
|
|
|
2 |
25 |
55 |
|
|
|
|
3 |
45 |
75 |
|
|
|
|
4 |
70 |
100 |
|
|
|
|
5 |
100 |
130 |
|
|
|
|
6 |
135 |
165 |
|
|
|
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What are Megan’s fixed costs? Given the nature of sidewalk shoveling production, why does Megan’s marginal cost curve look like it does in your graph?
Suppose the market
Suppose the market price of shoveling a sidewalk rises to $25 because it has been a snowy winter. How many sidewalks will Megan shovel each day to maximize profit?
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