Output TFC TVC TC MC ATC A 25 25 ---- -- 1 25 25 50 25 50 C 2 25 40 65 32.5 D 3 25 70 95 E 4 25 110 33.75 F 5 25 160 50 What is the average total cost at point F? 37 47 35 Cannot be determined. O O O
Output TFC TVC TC MC ATC A 25 25 ---- -- 1 25 25 50 25 50 C 2 25 40 65 32.5 D 3 25 70 95 E 4 25 110 33.75 F 5 25 160 50 What is the average total cost at point F? 37 47 35 Cannot be determined. O O O
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question

Transcribed Image Text:Output
TFC
TVC
TC
MC
АТС
А
25
25
1
25
25
50
25
50
C
2
25
40
65
32.5
3
25
70
95
4
25
110
33.75
F
5
25
160
50
What is the average total cost at point F?
37
47
35
Cannot be determined.
Expert Solution

Step 1
The marginal cost is the cost of producing an additional one unit of output. Marginal cost (MC) is calculated by subtracting the total cost of the nth unit and the total cost of (n-1)th unit.
Total cost (TC) is calculated by taking the sum of total fixed cost (TFC) and total variable cost (TVC). Average total cost (ATC) is calculated by dividing total cost (TC) by output (Q).
Output | TFC | TVC | TC | MC | ATC | |
A | 0 | 25 | 0 | 25+0=25 | ----- | ----- |
B | 1 | 25 | 25 | 25+25=50 | 50-25=25 | 50/1=50 |
C | 2 | 25 | 40 | 25+40=65 | 65-50=15 | 65/2=32.5 |
D | 3 | 25 | 70 | 25+70=95 | 95-65=30 | 95/3=31.67 |
E | 4 | 25 | 110 | 25+110=135 | 135-95=40 | 135/4=33.75 |
F | 5 | 25 | 160 | 25+160=185 | 185-135=50 | 185/5=37 |
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