Complete the cost table below quantity total cost

8. Complete the cost table below:
Quantity
Total
Cost ($)
Average
Total
Cost ($)
Marginal
Cost ($)
0 0 — —
1 35
2 25
3 28
4 115
5 40
8.
Quantity
Total
Cost ($)
Average
Total
Cost ($)
Marginal
Cost ($)
0 0 — —
1 35 35 35
2 60 30 25
3 84 28 24
4 115 28.75 31
5 155 31 40
9. Consider the costs for Catherine’s cupcake business:
Quantity
(batches)
Fixed Cost
($)
Total Cost
($)
1 50 75
2 50 85
3 50 102
4 50 127
5 50 165
6 50 210
Re-create the above table with columns showing Catherine’s variable cost, average total cost, average fixed
cost, and average variable cost.
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82 Part 2 Consumption and Production
Solution
Solution
9.
Q
(batches)
Variable
Cost ($)
Average
Total
Cost ($)
Average
Fixed
Cost ($)
Average
Variable
Cost ($)
1 25 75 50 25
2 35 42.5 25 17.5
3 52 34 16.67 17.33
4 77 31.75 12.5 19.25
5 115 33 10 23
6 160 35 8.33 26.67
10. Daniel’s Midland Archers (DMA) makes children’s wooden practice arrows. Draw a set of representative
short-run cost curves for DMA. Include average variable cost, average fixed cost, average total cost, and
marginal cost.
a. Suppose that Congress imposes a 39-cent excise tax on each children’s wooden practice arrow DMA
sells. Illustrate the effects of this tax on the cost curves of DMA. Which curves shift and which do not?
b. Suppose that the city where DMA produces arrows increases the annual property tax on DMA’s factory
from $80,000 to $150,000. Illustrate the effects of this tax on the cost curves of DMA. Which curves
shift and which do not?
11. Derive formulas for average fixed cost, average variable cost, average total cost, and marginal cost for the
following cost function:
TC = 100 + 10 Q
Costs
($/arrow)
Quantity of arrows
ATC
2
AVC
AFC
1
AFC
2
ATC
1
MC
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Costs Chapter 7 83
Solution
Solution