Purchase Solution

Calculate Average Variable Cost using Average Total cost

Not what you're looking for?

Ask Custom Question

Find average variable cost of 3,000,000 pairs of shoes
Is the answer $16.00? I got that answer by multipling the ATC ($20.00) by the percent of variable cost (80%)
Athletic Shoe Production

Normal Profit $6.00
Leather costs $2.00
Rubber costs $3.50
Metal costs $ .50
Cotton costs $3.00
Assembly $5.00
Total: $20.00 This is the lowest possible cost for the production of a single pair of shoes.
It is also the Average total cost (ATC) of the profit maximizing or loss minimizing quantity of
shoes: 3,000,000

Plant & Equipment 20% if total assembly cost (not ATC)
Labor 80% of total assembly cost (not ATC)

Purchase this Solution

Solution Preview

I don't think this answer is right.
<br>Just like posting 16788, the ATC is calculated to be $20
<br>However, we notice that the Fixed ...

Purchase this Solution


Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.