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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