Total Cost Marginal Cost (Dollars) Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Dollars per pair) Quantity (Pairs) (Dollars) (Dollars) (Dollars) (Dollars per pair) 120 80 1 200 40 2 240 45 3 285 55 4 340 85 5 425 115 540 On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For TC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $200, so you should start your ATC curve by olacing a green point at (1, 200). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of poots is $80, so you should start your MC curve by placing an orange square at (0.5, 80).) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 200 175 ATC 150 125 AVC 100 MC 75 50 25 2 3 QUANTITY (Pairs of boots) COSTS (Dollars per pair)

Total Cost Marginal Cost (Dollars) Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Dollars per pair) Quantity (Pairs) (Dollars) (Dollars) (Dollars) (Dollars per pair) 120 80 1 200 40 2 240 45 3 285 55 4 340 85 5 425 115 540 On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For TC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $200, so you should start your ATC curve by olacing a green point at (1, 200). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of poots is $80, so you should start your MC curve by placing an orange square at (0.5, 80).) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 200 175 ATC 150 125 AVC 100 MC 75 50 25 2 3 QUANTITY (Pairs of boots) COSTS (Dollars per pair)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

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