Anonymous

# complete the following table and with it discuss the shapes of AFC, AVC, ATC, AND MC?

QTY TFC TVC TC AFC AVC ATC MC

1 70 30 ? ? ? ? ?

2 ? 40 ? ? ? ? ?

3 ? 45 ? ? ? ? ?

4 ? 55 ? ? ? ? ?

5 ? 75 ? ? ? ? ?

6 ? 120 ? ? ? ? ?

7 ? 210 ? ? ? ? ?

Relevance

You have given the initial total fixed cost and total variable cost at each level of output qty.. Assuming total fixed cost do not increase till Qty 7 unitys, the following answer is consistent and should serve your purpose:

QTY...TFC...TVC....TC ....AFC ....AVC ... ATC... MC

1 .......70 ......30 ..100 ......70 .......30. . 100 ... 100..

2 ...... 70 .... 40 ...110..... 35.........20..........55........10

3 ... 70. .....45.....115.....23.3 ....15.........38.3........5

4 .... 70. ...55 ....125.....17.5....13.75.... 31.25.....10

5 ..... 70 ....75 .....145.....14........15 ........29...........20

6 ..... 70 ....120.....190.....11.63....20........31.63.....45

7 ..... 70..... 210 ....280.....10........30 .......40..........90

Note: here we get TC=TFC+TVC, AFC= TFC/Qty.,

AVC= TVC/Qtry., ATC = TC/Qty. , and

MC= TVC at given Qty - TVC at j\immediately preceeding Qty

QTY TFC TVC TC AFC AVC ATC MC

1 70 30 ? ? ? ? ?

2 ? 40 ? ? ? ? ?

3 ? 45 ? ? ? ? ?

4 ? 55 ? ? ? ? ?

5 ? 75 ? ? ? ? ?

6 ? 120 ? ? ? ? ?

7 ? 210 ? ? ? ? ?

This table i technically long. Also you need to mention the theory that is to be applied. According to the law of variable proportions, the tfc needs to be constant.

If Returns to scale theory is to be used, then the fixed factors should change in a fixed proportion!!