Your cousin Vinnie owns a painting company with fixed costs of $150 and the following schedule...
Question:
Your cousin Vinnie owns a painting company with fixed costs of $150 and the following schedule for variable costs:
| Quantity (Houses Painted per Month) | Variable Cost(Dollars) | Average Fixed Cost (Dollars) | Average Variable Cost (Dollars) | Average Total Cost(Dollars) |
| 1 | 15 | |||
| 2 | 35 | |||
| 3 | 60 | |||
| 4 | 90 | |||
| 5 | 135 | |||
| 6 | 240 | |||
| 7 | 480 |
The efficient scale is _____ houses.
Average Total Cost:
The average total cost refers to the value of the total cost divided by the number of units cost. According to accepted economic theory this cost changes as a function of the number of units produced. The most efficient and optimal level of production output is achieved when the producer produces at the volume that incurs the lowest average cost per unit. In other words where the average total cost level is at a minimum.
Answer and Explanation: 1
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View this answer| Quantity (Houses Painted per Month) | Variable Cost(Dollars) | Average Fixed Cost (Dollars) | Average Variable Cost (Dollars) | Average Total Cost(Dollars) |
| 1 | 15 | ... |
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Average Total Cost: Definition & Formula
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