To assess: Bob’s average variable cost , average total cost and marginal cost for each quantity of output. Concept introduction: Average variable cost: Average variable cost is a firm’s variable cost divided by the quantity of output produced. Average total cost: It is a firm’s total fixed cost plus the total variable cost divided by the quantity of output produced. Marginal cost: Marginal cost is the extra cost incurred by adding one more additional unit of a product or service.

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Chapter 12, Problem 3P

To determine

To assess:

Bob’s average variable cost, average total cost and marginal cost for each quantity of output.

Concept introduction:

Average variable cost:

Average variable cost is a firm’s variable cost divided by the quantity of output produced.

Average total cost:

It is a firm’s total fixed cost plus the total variable cost divided by the quantity of output produced.

Marginal cost:

Marginal cost is the extra cost incurred by adding one more additional unit of a product or service.

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