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    Determining the minimum efficient scale

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    Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs:

    Quantity of Houses Painted per month 1 2 3 4 5 6 7
    Variable costs $10 $20 $40 $80 $160 $320 $640

    Calculate average fixed cost, average variable cost, and average total cost for each quantity? What is the efficient scale for the painting company?

    © BrainMass Inc. brainmass.com October 10, 2019, 3:35 am ad1c9bdddf
    https://brainmass.com/economics/price-levels/determining-minimum-efficient-scale-426173

    Solution Preview

    Please refer attached file for better clarity of tables

    Q TFC TVC AFC=TFC/Q AVC=TVC/Q ATC=AFC+AVC
    1 200 10 200.00 10.00 210.00
    2 200 20 100.00 10.00 ...

    Solution Summary

    Solution describes the steps to calculate average costs and determines the efficient scale for the company.

    $2.19