ECON 110 Lecture Notes - Lecture 13: Average Variable Cost, Fixed Cost, Variable Cost
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Short-Run Cost Puzzle
| Total Product | Total Fixed Cost | Total Variable Cost | Total Cost | Average Fixed Cost | Average Variable Cost | Average Total Cost | Marginal Cost |
| 0 | ? | 0 | ? | ||||
| 40 | |||||||
| 1 | |||||||
| 2 | 115 | 20 | |||||
| 30 | |||||||
| 3 | 35 | 48.33 | |||||
| 25 | |||||||
| 4 | 32.50 | ||||||
| 5 | 8 | 33 | |||||
| 6 | 255 | 42.50 |
Use the definitions for TFC, TVC, TC, AFC, AVC, ATC and SMC along with the data provided above to fill in the missing values. Use space below for worksheet.
? means infinitely large. Applicable relationships are:
SAC = AFC + AVC
? ? ?
STC TFC TVC
??? = ??? + ???
Q Q Q
DTVC DTC
SMC = ???? = ???
DQ DQ
a. Construct the cost schedule using the data below for a firm operating in the short run.
b. Graph the average variable cost, average total cost, and marginal cost curves.
| Total Output (Q) | Total Fixed Cost (TFC) | Total Variable cost (TVC) | Total Cost (TC) | Marginal Cost (MC) | Average Fixed cost (AFC) | Average Variable Cost (AVC) | Average Total Cost (ATC) |
| 0 | Ā | Ā | $50 | Ā | Ā | Ā | Ā |
| 1 | Ā | Ā | $70 | Ā | Ā | Ā | Ā |
| 2 | Ā | Ā | $85 | Ā | Ā | Ā | Ā |
| 3 | Ā | Ā | $95 | Ā | Ā | Ā | Ā |
| 4 | Ā | Ā | $100 | Ā | Ā | Ā | Ā |
| 5 | Ā | Ā | $110 | Ā | Ā | Ā | Ā |
| 6 | Ā | Ā | $130 | Ā | Ā | Ā | Ā |
| 7 | Ā | Ā | $165 | Ā | Ā | Ā | Ā |
| 8 | Ā | Ā | $215 | Ā | Ā | Ā | Ā |
| 9 | Ā | Ā | $275 | Ā | Ā | Ā | Ā |
Ā
Construct the cost schedule using the data below for a firm operating in the short run. Graph the average variable cost, the average total cost, and marginal cost curves.
| Total Output (Q) | Total fixed cost (TFC) (in $) | Total variable cost (TVC) (in $) | Total cost (TC) (in $) | Marginal cost (MC) (in $) | Average fixed cost (AFC) (in $) | Average variable cost (AVC) (in $) | Average total cost (ATC) (in $) |
| 0 | 50 | Ā | 50 | Ā | Ā | Ā | Ā |
| 1 | Ā | Ā | 70 | Ā | Ā | Ā | Ā |
| 2 | Ā | Ā | 85 | Ā | Ā | Ā | Ā |
| 3 | Ā | Ā | 95 | Ā | Ā | Ā | Ā |
| 4 | Ā | Ā | 100 | Ā | Ā | Ā | Ā |
| 5 | Ā | Ā | 110 | Ā | Ā | Ā | Ā |
| 6 | Ā | Ā | 130 | Ā | Ā | Ā | Ā |
| 7 | Ā | Ā | 165 | Ā | Ā | Ā | Ā |
| 8 | Ā | Ā | 215 | Ā | Ā | Ā | Ā |
| 9 | Ā | Ā | 275 | Ā | Ā | Ā | Ā |
