Economics2080.15 marksNumerical: cost curves calculationCost schedule computations
Cost Analysis Problem Consider the following cost schedule: | Output | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |--------|---|---|---|---|---|---|---|---|---| | TFC | 200 | - | - | - | - | - | - | - | - | | TVC | 0 | 20 | 36 | 48 | 64 | 100 | 160 | 248 | 360 | a) Calculate TC, AFC, AVC, AC and MC. b) Der
Cost Analysis Problem
Consider the following cost schedule:
| Output | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|---|
| TFC | 200 | - | - | - | - | - | - | - | - |
| TVC | 0 | 20 | 36 | 48 | 64 | 100 | 160 | 248 | 360 |
a) Calculate $TC$, $AFC$, $AVC$, $AC$ and $MC$.
b) Derive $TFC$, $TVC$ and $TC$ curves. Explain their relationship. [5+0]
- TFC = 200 (fixed cost, constant at all output levels) - TVC by output: Output (Q) 0 1 2 3 4 5 6 7 8 ------------------------------ TVC 0 20 36 48 64 100 160 248 360 Formulas: - $TC = TFC + TVC$ - $AFC = TFC / Q$ - $AVC = TVC / Q$ - $AC = TC / Q = AFC + AVC$ -