The following table shows an LED light bulb manufacturer's total cost of producing LED light...
Question:
The following table shows an LED light bulb manufacturer's total cost of producing LED light bulbs.
| Cases of LED light bulbs produced in an hour | Total Cost ($) |
|---|---|
| 0 | 4,500 |
| 10 | 4,900 |
| 20 | 5,100 |
| 30 | 5,300 |
| 40 | 5,400 |
| 50 | 5,700 |
| 60 | 6,700 |
| 70 | 7,900 |
| 80 | 9,700 |
| 90 | 11,800 |
1. What is this manufacturer's fixed cost? Explain why.
2. Assuming that you only know the total costs, explain how to calculate each of the following.
A. Variable cost (VC)
B. Average variable cost (AVC)
C. Average total costs (ATC)
D, Average fixed cost (AFC)
E. Marginal costs (MC)
Total cost and average variable cost
The average variable cost (AVC) is the ratio of the total variable cost (TVC) to the total output and the total cost (TC) is the aggregate of fixed costs and variable costs.
Answer and Explanation: 1
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The manufacturer's fixed cost is $4500 in light of the fact that fixed cost is an expense that should be paid even if the production is zero. From...
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Average Variable Cost (AVC): Definition, Function & Equation
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Chapter 13 / Lesson 8
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Learn the definition and applications of average variable cost, the average variable cost formula, and how to calculate the average variable cost using its formula.
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