Explore BrainMass
Share

Explore BrainMass

    Calculating a firm's costs: Formulas and examples

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Calculate the following short-run costs for a firm:

    Q = 0, TC = 20: what is the fixed cost?
    Q = 1, MC = 20: what is the total cost when Q = 1?
    Q = 2, AVC = 15: what is average total cost when Q = 2?
    Q = 3, TC = 77: what is marginal cost when Q = 3?
    Q = 4, TVC = 76: what is marginal cost when Q = 4?

    © BrainMass Inc. brainmass.com October 10, 2019, 6:08 am ad1c9bdddf
    https://brainmass.com/economics/output-and-costs/calculating-a-firm-s-costs-formulas-and-examples-530796

    Solution Preview

    >Q = 0, TC = 20: what is the fixed cost?

    When Quantity (Q) = 0, Variable Cost (VC) is also 0, so the Fixed Cost (FC) must be 20.

    >Q = 1, MC = 20: what is the total cost when Q = 1?

    The Marginal Cost (MC) is the cost of producing an ...

    Solution Summary

    This solution shows the correct formulas to use when calculating a firm's costs and illustrates with concrete examples.

    $2.19