Chapter 11, Problem 3P

To determine

• The variable cost and total cost for a given level of production
• Marginal cost

To Draw:

• Variable cost curve
• Total cost curve

Concept Introduction:

• Fixed Cost - A cost which does not change with an increase or decrease in units produced and it remains constant. Fixed costs need to be paid even when there is no production.

• Variable Cost − This is a cost which varies with the number of units produced.

• Total Cost − It is the sum of total fixed and variable costs

• Marginal Cost − This is the change in the total cost of production for making one additional unit of an item