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Unformatted text preview: Cost Curves 1) A wheat farmer has total production costs given by the equation TC=100+5Q, where Q is output, measured in bushels of wheat. a. What is the farmer's marginal cost (MC) of production? b. What is the farmer's fixed cost? Give some examples of what costs might be fixed for a wheat farmer. c. Write the equation giving the farmer's variable cost as a function of quantity. What are examples of variable costs for a farmer? d. Write the equations for the farmer's average total cost (ATC) and average variable cost (AVC), both as functions of Q. e. Show the ATC, AVC, and MC on one graph. Explain what is happening to average fixed costs as Q increases, and explain how this relates to what you see in your graph....
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 Fall '07
 Hansen
 Microeconomics, Externalities, Public Good

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