Description
Looking for assistance with unit 7 assignment attached.
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Attached.
Running Head: MICROECONOMICS.
MICROECONOMICS
STUDENT NAME:
TUTOR NAME:
COURSE NUMBER:
SECTION:
DATE:
2|P a g e
Q1. Total Costs (TC) relates to the sum of all expenses encountered so as to reach a certain level
of output. It also refers to the amount of the fixed (FC) and variable costs (Q), (TC = FC + Q).
When total costs are known, it is possible to calculate fixed costs, variable costs and
consequently the average costs (AC) from the application of the total cost formula.
A) Fixed Costs.
These refer to all business costs, including rent, rates, loans, and interests, which remain constant
regardless of the quantity of goods provided or services offered, (Harris, C). These costs do not
change as output varies. With total costs given, it is possible to calculate the fixed costs by
application of the total cost formula. Fixed Costs, obtained from the subtraction of output or
variable cost from the total costs.
Total Costs= Fixed costs + Variable costs
Fixed Cost = Total Costs – Variable Costs
FC= TC – Q.
When the output is zero, VC=0, hence FC= TC where total costs equal fixed costs. When
production starts to increase, output increases, variable costs inc...