01 Saved 4 Given the cost wdormalion below answer the folowi

01? Saved 4 Given the cost wdormalion below answer the folowing questions Instructions Round your answers to 2 decimal places a when onsaw 10, total variable costs s th when output is 20, average need cost is $ cwhen outpad is 30, average variabl\" cost is $ d When output s 40, average total cost i e When output is 50, marginal costs Mwoes

Solution

a) Marginal cost is the change in total cost for an additional unit of output. And the marginal cost occurs due to variable cost when the amount of inputs used is changed.

Thus, when output is 10, TVC is (98.1 - 20) = 78.1

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b) Average Fixed Cost (AFC) = Fixed Cost (FC) /Output (Q)

Fixed cost is the cost incurred when the firm produces 0 units of output.

FC = 20

When output is 20, FC is (20 / 20) = 1

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c) Average Variable Cost(AVC) = Variable Cost(VC) / Q

When output is 30 VC is (160.7 - 140.8) = 19.9

AVC = 19.9 / 30 = 0.663

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d) Average Total Cost (ATC) = Total Cost / Q

ATC = 170.4 / 40 = 4.26

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e) Definition of Marginal Cost(MC) is given in the first part.

MC = 182.5 - 170.4 = 12.1