QUESTION 15Use the following table and use your previous calculations at what quantity of output doesmarginal cost = average variable cost and marginal cost = average total cost Total OutputTotal CostTFCTVCAFCAVCATCMC0$20 10$40 20$60 30$90 40$120 50$180 60$280 a.MC = ATC between 20/40 of output MC = AVC between 10/30 of output b.MC = ATC at 40 of output MC = AVC at 20 of output c.MC = ATC at 30 of output MC = AVC at 10 of output d.MC = ATC between 10/20 of output MC = AVC between 30/40 of output e.MC = ATC between 30/40 of output MC = AVC between 10/20 of output

Total cost is the sum of total fixed cost and total variable cost. Marginal cost is the addition to the total cost to produce an additional unit of output. In order to find the quantity of output where MC = AVC and MC = ATC, let us fill the given table. Total cost at 0 output gives the fixed cost. Total output Total cost TFC TVC AFC AVC ATC MC 0 $20 20 0 - - - - 10 $40 20 20 2 2 4 2 20 $60 20 40 1 2 3 2 30 $90 20 70 0.67 2.33 3 3 40 $120 20 100 0.50 2.50 3 3 50 $180 20 160 0.40 3.20 3.60 6 60 $280 20 260 0.33 4.33 4.67 10 Marginal cost equals Average variable cost which equals $2 (MC=AVC=$2) at 10 and 20 units of output. Marginal cost equals Average total cost which equals $3 (MC= ATC= $3) at 30 units of output. Therefore the correct choice is b. MC = AVC at 20 of output MC = ATC at 30 of output.

Answered: Use the following table and use your…

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 15

Use the following table and use your previous calculations at what quantity of output does

marginal cost = average variable cost and marginal cost = average total cost

Total Output	Total Cost	TFC	TVC	AFC	AVC	ATC	MC
0	$20
10	$40
20	$60
30	$90
40	$120
50	$180
60	$280

	a.	MC = ATC between 20/40 of output MC = AVC between 10/30 of output
	b.	MC = ATC at 40 of output MC = AVC at 20 of output
	c.	MC = ATC at 30 of output MC = AVC at 10 of output
	d.	MC = ATC between 10/20 of output MC = AVC between 30/40 of output
	e.	MC = ATC between 30/40 of output MC = AVC between 10/20 of output

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