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Cost Data: TC, AVC, AFC, MC

Given the output and total Cost Data in the table below, complete the following columns: variable cost, fixed costs, marginal costs,average total columns, then on a graph, plot the marginal and average costs data (plot them on the same graph, not on two different graphs).

Then from graph identify the level of output at which margianl cost equals average cost.

output Cost
0 50
1 60
2 75
3 100
4 150
5 225
6 400

Solution Preview

Hello Student,

You have been asked to complete a cost data table and plot on a gragh the marginal cost and average cost data. Before you make reference to the attached excel file which lays out all the data, you need to take note of each type of cost is and how they are calculated.

Variable Costs is considered as that element of total cost which usually varies with the number of units produced by a firm or output. It is calculated by multiplying the total number of units produced by cost to produce each unit.

Fixed Costs is considered as that element of totat cost ...

Solution Summary

This solution provides a detailed step-by-step solution as to how to calculate total variable cost, total fixed costs, average variable costs, average fixed costs and marginal costs. A table is provided in the attached excel document which shows the cost data and a graph.