This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
ScanSolve AI Answer
Here is the completed table with all calculations shown. The formulas used are: Total Fixed Cost (TFC) = Total Cost (TC) when Quantity (Q) = 0 (TFC is constant for all output levels) Total Variable Cost (TVC) = TC - TFC Average Fixed Cost (AFC) = (TFC)/(Q) Average Variable Cost (AVC) = (TVC)/(Q) Average Total Cost (ATC) = (TC)/(Q) or ATC = AFC + AVC Marginal Cost (MC) = ( TC)/( Q) or ( TVC)/( Q) Here is the completed table: |c|c|c|c|c|c|c|c| Q & TC & TFC & TVC & AFC & AVC & ATC & MC \\ 0 & 60 & 60 & 0 & - & - & - & - \\ 1 & 140 & 60 & 80 & 60 & 80 & 140 & 80 \\ 2 & 210 & 60 & 150 & 30 & 75 & 105 & 70 \\ 3 & 270 & 60 & 210 & 20 & 70 & 90 & 60 \\ 4 & 320 & 60 & 260 & 15 & 65 & 80 & 50 \\ 5 & 380 & 60 & 320 & 12 & 64 & 76 & 60 \\ 6 & 420 & 60 & 360 & 10 & 60 & 70 & 40 \\ Here are the step-by-step calculations for each row: Step 1: Determine TFC. At Q=0, TC=60. Since TVC=0 at Q=0, TC=TFC. Therefore, TFC=60 for all output levels. Step 2: Calculate for Q=0. TC = 60 (given) TFC = 60 TVC = TC - TFC = 60 - 60 = 0 AFC, AVC, ATC, MC are not applicable or undefined at Q=0. Step 3: Calculate for Q=1. TC = 140 (given) TFC = 60 TVC = TC - TFC = 140 - 60 = 80 AFC = (TFC)/(Q) = (60)/(1) = 60 AVC = (TVC)/(Q) = (80)/(1) = 80 ATC = (TC)/(Q) = (140)/(1) = 140 MC = ( TC)/( Q) = (140 - 60)/(1 - 0) = (80)/(1) = 80 Step 4: Calculate for Q=2. TC = 210 (given) TFC = 60 TVC = TC - TFC = 210 - 60 = 150 AFC = (TFC)/(Q) = (60)/(2) = 30 AVC = (TVC)/(Q) = (150)/(2) = 75 ATC = (TC)/(Q) = (210)/(2) = 105 MC = ( TC)/( Q) = (210 - 140)/(2 - 1) = (70)/(1) = 70 Step 5: Calculate for Q=3. TC = 270 (given) TFC = 60 TVC = TC - TFC = 270 - 60 = 210 AFC = (TFC)/(Q) = (60)/(3) = 20 AVC = (TVC)/(Q) = (210)/(3) = 70 ATC = (TC)/(Q) = (270)/(3) = 90 MC = ( TC)/( Q) = (270 - 210)/(3 - 2) = (60)/(1) = 60 Step 6: Calculate for Q=4. TC = 320 (given) TFC = 60 TVC = TC - TFC = 320 - 60 = 260 AFC = (TFC)/(Q) = (60)/(4) = 15 AVC = (TVC)/(Q) = (260)/(4) = 65 ATC = (TC)/(Q) = (320)/(4) = 80 MC = ( TC)/( Q) = (320 - 270)/(4 - 3) = (50)/(1) = 50 Step 7: Calculate for Q=5. TC = 380 (given) TFC = 60 TVC = TC - TFC = 380 - 60 = 320 AFC = (TFC)/(Q) = (60)/(5) = 12 AVC = (TVC)/(Q) = (320)/(5) = 64 ATC = (TC)/(Q) = (380)/(5) = 76 MC = ( TC)/( Q) = (380 - 320)/(5 - 4) = (60)/(1) = 60 Step 8: Calculate for Q=6. TC = 420 (given) TFC = 60 TVC = TC - TFC = 420 - 60 = 360 AFC = (TFC)/(Q) = (60)/(6) = 10 AVC = (TVC)/(Q) = (360)/(6) = 60 ATC = (TC)/(Q) = (420)/(6) = 70 $MC = ( TC)/( Q) = (420 - 380)/(6 - 5) = (40)/(1) =