00:01
Let's go over this question.
00:05
So it says that in this industry we have 100 firms and we're given the fixed costs.
00:13
We're going to complete table 1 by computing the missing values.
00:27
So we know that the fixed cost is 32.
00:31
So we already have the fixed cost for each of the rows.
00:35
So we can go ahead and fill in that column.
00:41
And we also have average variable cost.
00:45
Average variable cost is variable cost divided by the quantity.
00:51
So to find variable cost we do average variable cost times the quantity.
00:56
So for the first row we have 4 times 2 giving you 8.
01:04
So you would do that for each of the rows to get the variable cost.
01:16
Total cost is equal to fixed cost plus variable cost.
01:23
So for the first row our first cost is 32 and the variable cost we calculated was 8.
01:30
So total cost ends up being 40.
01:33
Then for the marginal cost it's change in our total cost over change in quantity.
01:47
So we have the marginal cost of 4 for the first row.
01:57
So for the second row we have average variable cost as 8.
02:09
Then our quantity is 4.
02:16
So then our variable cost ends up being 32.
02:23
Total cost is equal to fixed cost plus variable cost.
02:28
So we get 64.
02:31
So our change in total cost between the second and first row is 64 minus 40.
02:38
And then our change in quantity is 4 minus 2.
02:45
So then we get 24 over 2.
02:48
And then marginal cost ends up being 12...