The Mexican company generates a production per unit of time, each unit has a fixed cost of $40.00. The table shows the units produced and their variable cost. UNITS PRODUCED Q TOTAL FIXED COST TOTAL VARIABLE COST 20 40 30 30 40 40 40 40 55 50 40 65 60 40 75 70 40 90 80 40 100 90 40 115 100 40 125 a) Calculate the total cost of each unit produced CT=CFT + CVT b) Calculate the average fixed cost and average variable cost for each unit produced. CFME= CFT/Q CVME= CVT/Q c) Calculate the Average Cost (Cme) and Marginal Cost (MC) for each unit produced. Cme= CT/Q CMg= ACT/AQ d) Make a table, where you will add all the calculated costs

The Mexican company generates a production per unit of time, each unit has a fixed cost of $40.00. The table shows the units produced and their variable cost. UNITS PRODUCED Q TOTAL FIXED COST TOTAL VARIABLE COST 20 40 30 30 40 40 40 40 55 50 40 65 60 40 75 70 40 90 80 40 100 90 40 115 100 40 125 a) Calculate the total cost of each unit produced CT=CFT + CVT b) Calculate the average fixed cost and average variable cost for each unit produced. CFME= CFT/Q CVME= CVT/Q c) Calculate the Average Cost (Cme) and Marginal Cost (MC) for each unit produced. Cme= CT/Q CMg= ACT/AQ d) Make a table, where you will add all the calculated costs

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

The Mexican company generates a production per unit of time, each unit has a fixed cost of
$40.00. The table shows the units produced and their variable cost.
UNITS PRODUCED Q
TOTAL FIXED COST
TOTAL VARIABLE COST
20
40
30
30
40
40
40
40
55
50
40
65
60
40
75
70
40
90
80
40
100
90
40
115
100
40
125
a) Calculate the total cost of each unit produced CT=CFT + CVT
b) Calculate the average fixed cost and average variable cost for each unit produced. CFME= CFT/Q
CVME= CVT/Q
c) Calculate the Average Cost (Cme) and Marginal Cost (MC) for each unit produced. Cme= CT/Q
CMg= ACT/AQ d) Make a table, where you will add all the calculated costs
TOTAL COST
AVERAGE FIXED
AVERAGE
AVERAGE COST
MARGINAL COST
COST
VARIABLE COST
e) Make a graph with the CFT, CVT and CT. On the back it describes what the graphed curves mean
f) Make another graph, but now with the CFMe, CVME, Cme and CMg. Then describe the variation
in the graphed curves.

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