A firm's total cost is $1,000 if it produces one unit, $1,600 if it produces two units, and $2,000 if it produces three units of output.
Draw up a table of total, average, and marginal costs for this firm.
Draw an average and marginal cost curve for this firm. Describe the relationship between the two curves.
Cost is the expenses incurred in production activity. Total cost is the summation of the cost of production of all units. Average cost is per unit cost, it is found by dividing the total cost by the units. Marginal cost is the change in the total cost when additional unit of the output is produced.
Answer and Explanation: 1
A firm's total cost is $1,000 if it produces one unit, $1,600 if it produces two units and $2,000 if it produces three units of output.
Draw up a...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 23
Learn what is the average total cost. Learn its use, its formula, and how to apply it.