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Bill's Bakery has a fire and Bill loses some of his cost data
Bill's Bakery has a fire and Bill loses some of his cost data. He recovers after the fire and provides the information in the following table all the cost numbers are dollars). Bill asks you to help him and find the missing data in the four spaces identified as A, B, D, and E. A is the average fixed cost AFC when the output is 20. B is the average variable cost, AVC when the output is 20. D is the average total cost (ATC) when the output is 40 and E is the marginal cost(MC) when output increases from 40 units to 50 units. PICK the correct answer for A, B, D, and E respectively from the answers provided below. TP Q AFC AVC ATC MC AFC = TFC AVC = AFC + AVC = MC= Q ATC - Select one: ATC AFC ATC= TC - QL A=$60 : B=$80: D= $40; E= $150 TC= ATC x Olb. TFC + TVC = A=$50; B=$80: D= $40; E= $130 TC ATC= Ahola 10 120 100 220 A=$60; B=$90: D= $40; E= $140 180 O d. JA=$120: B=$90; D= $70 : E= $140 20 A B 150 90 30 40 90 130 130 40 30 40 D LLI 50 24 108 132
Expert Solution
A: note that Q is 10 and AFC is 120. Hence FC is 1200. Then we use FC = 1200 to find AFC = 1200/20 = 60. Thus A = 60
B: ATC - AFC is AVC. Hence AVC = 150 - 60 = 90. Thus B = 90
D: ATC = AVC + AFC = 40 + 30 = 70. Hence D = 70
E: 140
Option C is correct
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