The accompanying table shows a boat manufacturers total cost

The accompanying table shows a boat manufacturer’s total cost of producing boats. Quantity of Boats Total Cost 0 $ 450,000 1 $ 490,000 2 $ 510,000 3 $ 520,000 4 $ 540,000 5 $ 570,000 6 $ 610,000 7 $ 670,000 8 $ 750,000 9 $ 870,000 2. For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AFC).

Solution

Q

TC

FC

VC

AVC

ATC

AFC

0

450000

450000

0

1

490000

450000

40000

40000.0

490000.0

450000.0

2

510000

450000

60000

30000.0

255000.0

225000.0

3

520000

450000

70000

23333.3

173333.3

150000.0

4

540000

450000

90000

22500.0

135000.0

112500.0

5

570000

450000

120000

24000.0

114000.0

90000.0

6

610000

450000

160000

26666.7

101666.7

75000.0

7

670000

450000

220000

31428.6

95714.3

64285.7

8

750000

450000

300000

37500.0

93750.0

56250.0

9

870000

450000

420000

46666.7

96666.7

50000.0

FC is the cost of production that does not depends on amount of goods produced.

FC=TC(Q=0)

VC=TC-FC

AVC=VC/Q

ATC=TC/Q

AFC=FC/Q

Q	TC	FC	VC	AVC	ATC	AFC
0	450000	450000	0
1	490000	450000	40000	40000.0	490000.0	450000.0
2	510000	450000	60000	30000.0	255000.0	225000.0
3	520000	450000	70000	23333.3	173333.3	150000.0
4	540000	450000	90000	22500.0	135000.0	112500.0
5	570000	450000	120000	24000.0	114000.0	90000.0
6	610000	450000	160000	26666.7	101666.7	75000.0
7	670000	450000	220000	31428.6	95714.3	64285.7
8	750000	450000	300000	37500.0	93750.0	56250.0
9	870000	450000	420000	46666.7	96666.7	50000.0