# Microeconomics Homework

May 27th, 2016
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The accompanying table shows a car manufacturer’s total cost of producing cars a. What is this manufacturer’s fixed cost?

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BU224 Unit 7 Assignment Template:Name:Course Number:- BU224Section Number:- 01Unit Number:-7Date:1. The accompanying table shows a car manufacturers total cost of producing cars.Quantityof carsTotal Cost0\$500,0001\$540,0002\$560,0003\$570,0004\$590,0005\$620,0006\$660,0007\$720,0008\$800,0009\$920,00010\$1,100,000a. What is this manufacturers fixed cost?\$500,000b. For each level of output except zero output, calculate this manufacturers marginal cost(MC).MC= Change in total cost of Unit output / change in quantity of output\$500,000 - \$540,000 = -\$40,000 / 0-1 = 1\$40,000 / 1 = \$40,000b. For each level of output except zero output, calculate the variable cost (VC).VC = FC TCVC = \$540,000 - \$500,000 = \$40,000d. For each level of output except zero output, calculate the average variable cost (AVC),AVC = VC / # UnitsAVC = \$500,000 / 1 = \$500,000e. For each level of output, calculate the average total cost (ATC),Page 1 of 4ATC= TC/# unitsATC = \$500,000 / 1 = \$500,000f. For each level of output except zero output, calculate the average fixed cost (AFC).AFC = FC / # unitsAFC = \$500,000 /1 = \$500,000Quantit

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