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Unformatted text preview: a. What is your fixed cost of doing business? What is your variable cost per cup? b. Construct a table showing your total cost, average total cost, and marginal cost for output levels varying from 0 to 10 gallons. (Hint: There are 16 cups in a gallon) Draw the three cost curves. 10. Jane’s Juice Bar has the following cost schedules: Quantity Variable cost Total cost 0 vats of juice $0 $30 1 10 40 2 25 55 3 45 75 4 70 100 5 100 130 6 135 165 a. Calculate average variable cost, average total cost, and marginal cost for each quantity. Put these numbers in a similar table as above. b. Graph all three curves. What is the relationship between the marginal-cost curve and the average total cost curve? Between the marginal cost curve and the average variable cost curve? Explain...
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- Summer '09
- Microeconomics, average total cost