Chapter 13 Active Learning 5 A. Compute the various cost curves. All decimal points may be rounded off to two decimal places. Hint: TC = FC + VC MC = ATC/AQ (Note we do not compute MC for Q = 0) AFC = FC/Q (Note we do not compute AFC for Q = 0) AVC = VC/Q (Note we do not compute AVC for Q = 0) ATC = TC/Q or [FC+VC]/Q or AFC + AVC (Note we do not compute ATC for Q = 0) Q Fixed Variable Total Cost Marginal Cost Cost Cost [TC] [MC] Average Fixed Cost Average Variable Average Total Cost [FC] [VC] [AFC] Cost [AVC] [ATC] 0 $50 n/a n/a n/a n/a 1 $10 $10 $10 $60 2 $30 $80 3 $30 $16.67 $20 $36.67 4 $100 $150 $12.50 $37.50 5 $150 $30 6 $210 $260 $60 $8.33 $35 $43.33 1
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To compute the Marginal Cost (MC), we divide the change in Total Cost (TC) by the change in Quantity (Q). For example, to find MC for Q = 1, we subtract TC for Q = 0 from TC for Q = 1 and divide it by the change in Q (1 - 0 = 1). MC for Q = 1: (TC for Q = 1 - Show more…
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Consider the following cost function. a. Find the average cost and marginal cost functions. b. Determine the average and marginal cost when x = a. c. Interpret the values obtained in part (b). C(x) = 0.02x^3 + 0.2x^2 + 30x + 130, 0 <= x <= 1500, a = 800 a. The average cost function is Cbar(x) = The marginal cost is function is C'(x) = b. The average cost when x = a is $ (Round to two decimal places as needed.) The marginal cost when x = a is $ (Round to two decimal places as needed.) c. Choose the correct interpretation of the average cost when x = a. A. The cost of producing the 801st item is about $38,750.00. B. The average cost per item is about $12,990.16 when 800 items are produced. C. The cost of producing 800 items is about $11,690.16. D. The cost of producing the 801st item is about $1,630.78.
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