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Homework answers / question archive / Use the definitions for TFC, TVC, TC, AFC, AVC, ATC, and SMC along with the data provided below to fill in the missing values

Use the definitions for TFC, TVC, TC, AFC, AVC, ATC, and SMC along with the data provided below to fill in the missing values

Accounting

Use the definitions for TFC, TVC, TC, AFC, AVC, ATC, and SMC along with the data provided below to fill in the missing values.

Short run cross puzzle

 

Total product Total fixed cost Total variable cost Total cost Average fixed cost Average variable cost Average total cost Marginal cost
0     60 ∞∞ 0    
              45
1     60     105  
               
2     145   42.50    
              35
3              
               
4   150          
               
5   190       50  
               
6     295    

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The table below shows all values filled in. The steps taken to fill in this table are:

  1. When there are no units produced, there is no variable cost, so the total cost (60) is equal to the fixed cost. The fixed cost is then the same for all output, so this can be filled in for all quantities.
  2. The marginal cost is the additional cost of an additional unit of output and is equal to the change in the total cost divided by the change in the quantity. So if the marginal cost of the first unit is $45, then the total cost increases by $45 as output increases from 0 units to 1.
  3. The total variable costs of the 1st, 2nd and 6th units are then equal to the total cost minus the fixed cost.
  4. The total costs of the 4th and 5th units are equal to the total fixed cost plus the total variable cost.
  5. The total cost of the 3rd unit is equal to the total cost of the 2nd unit ($145) plus the marginal cost of the 3rd unit ($35).
  6. The total variable costs of the 3rd unit is equal to the total cost minus the fixed cost.
  7. For each unit, the average fixed cost is equal to the total fixed cost divided by the quantity.
  8. For each unit, the average variable cost is equal to the total variable cost divided by the quantity.
  9. For each unit, the average total cost is equal to the total cost divided by the quantity.
  10. For each unit, the marginal cost is equal to the change in the total cost divided by the quantity (which is one for all units).

 

TP TFC TVC TC AFC AVC ATC MC
0 60 0 60 - - - -
1 60 45 105 60 45 105 45
2 60 85 145 30 42.5 72.5 40
3 60 120 180 20 40 60 35
4 60 150 210 15 37.5 52.5 30
5 60 190 250 12 38 50 40
6 60 235 295 10 39.17 49.17 45