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Every fourth of July, A Stitch in Time prints T-shirts for visitors to the small town of Liberty
Every fourth of July, A Stitch in Time prints T-shirts for visitors to the small town of Liberty. This production process involves both fixed and variable costs. The fixed cost of printing these shirts is $10. The following table describes some of these costs. PLEASE SHOW WORK
| Output | Total Variable Cost | Total Cost | Average Variable Cost | Average Total Cost | Marginal Cost |
| 0 | 0 | 10.00 | |||
| 1 | 8.00 | ||||
| 2 | 12.00 | ||||
| 3 | 28.00 | ||||
| 4 | 4.00 | ||||
| 5 | 0 | 6.40 | |||
| 6 | 10.00 | ||||
| 7 | 54.00 |
Expert Solution
| Output | Total Variable Cost | Total Cost | Average Variable Cost | Average Total Cost | Marginal Cost |
|---|---|---|---|---|---|
| 0 | 0 | 10 | 0 | ----- | --------- |
| 1 | 8 | 18 | 8 | 18 | 8 |
| 2 | 14 | 24 | 7 | 12 | 6 |
| 3 | 18 | 28 | 6 | 9.33 | 4 |
| 4 | 22 | 32 | 5.5 | 8 | 4 |
| 5 | 32 | 42 | 6.4 | 8.4 | 10 |
| 6 | 42 | 52 | 7 | 8.66 | 10 |
| 7 | 54 | 64 | 7.71 | 9.14 | 12 |
Total Cost = Total Variable cost + Fixed Cost
Average Total Cost = Total Cost/Output
Average variable Cost = Total Variable Cost/Output
Marginal Cost = Total Cost at the current unit - Total Cost at the previous unit.
At 0 unit of output Total Cost = 10, Total Variable cost = 0, therefore, Total Fixed Cost = 10-0 = 10.
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