Question

a) How to calculate the missing numbers in the chart ? b) How to plot the TFC, TVC, and TC curves in one diagram and the AFC, AVC, ATC, and MC in another diagram? c) What is the relationship between total costs and output?

d) What does the vertical distance between TC and TVC curves measure?

A firm’s cost schedule is shown below (in dollars):

Answer 1

See explanation section

Explanation:

a) How to calculate the missing numbers in the chart ?

!Fill the missing values]()

b) How to plot the TFC, TVC, and TC curves in one diagram and the AFC, AVC, ATC, and MC in another diagram?

c) What is the relationship between total costs and output?

Initially, TC increases at a decreasing rate as output increases. Then, TC increases at a constant rate as output increases.
finally, TC increases at an increasing rate as output increases.

d) What does the vertical distance between TC and TVC curves measure?

It shows the TFC.