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    how to compute VC, AVC, MC from a data table and graph them

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    Cost curves are derived from a data table and graphed. There is also a brief discussion regarding the relationship between average variable costs and marginal costs.

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    Solution Preview

    Please see the attached file for full explanation and graphs.

    A. Assuming that the price of labor (Pl) is $5 per unit and the price of capital (Pk) is $10 per unit, compute and graph the total variable cost curve, the marginal cost curve, and the average variable cost curve for the firm.
    As we can see the VC ...

    Solution Summary

    The problem begins with a data table consisting of cost data for Labor and Capital as well as the wage and rental costs for the inputs. From this table variable costs are computed as are average variable costs and marginal costs. These curves are then graphed and discussed.