Economics20815 marksNumerical: cost curves calculationCost schedule computations
Cost Analysis Question Consider the following cost schedule: | Output (Q) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | |---|---|---|---|---|---|---|---|---|---|---| | Total Cost (TC) | 200 | 250 | 254 | 265 | 270 | 300 | 350 | 380 | 400 | 420 | a. Compute TFC, AFC, AVC, AC and MC. b. Show the relations
Cost Analysis Question
Consider the following cost schedule:
| Output (Q) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cost (TC) | 200 | 250 | 254 | 265 | 270 | 300 | 350 | 380 | 400 | 420 |
a. Compute TFC, AFC, AVC, AC and MC.
b. Show the relationship between AC and MC. [5+0]
Q 0 1 2 3 4 5 6 7 8 9 --------------------------------- TC 200 250 254 265 270 300 350 380 400 420 TFC = TC when Q = 0, since fixed cost does not vary with output. $$TFC = 200 \text{ (constant at all output levels)}$$ $$TVC = TC - TFC$$ Q TC TVC ----------- 0 200 0 1 250 50 2 254 54 3 265 65 4 27...