Complete the following cost schedules and answer the questions that follow. Output Total Cost TC...
Complete the following cost schedules and answer the questions that follow.
| Output | Total Cost TC | Average cost AC | Marginal Cost |
| 1 | 18 | 8 | - |
| 2 | 14 | ? | - |
| 3 | ? | 6 | - |
| 4 | 20 | ? | - |
| 5 | ? | 6 | - |
| 6 | 46 | ? | - |
(a) At what output is AC at the minimum?
(b)At what output is MC at the minimum
(c) At what output does AC start increasing?
(d) At what output does MC start to be greater than AC
(e) What is the maximum output?
Explanation
| Output | Total Cost TC | Average cost AC | Marginal Cost |
| 1 | 18 | 8 | - |
| 2 | 14 | c | f |
| 3 | a | 6 | g |
| 4 | 20 | d | h |
| 5 | b | 6 | i |
| 6 | 46 | e | j |
TC = AC x Output
a = output 3
TC = AC x output = 6 x 3
TC = 18
b = TC = 6 x 5
TC = 30
c = AC = \(\frac{TC}{output}\) = \(\fracfrac{14}{7}\) = 2
d = AC = \(\frac{20}{4}\) =5
e = \(\frac{48}{4}\) = 8
f = MC at output 2
TC2 -TC = 14 - 8 = 6
g. MC at output 3 = 18 - 14 = 4
h MC at output 4 =20 -18 = 2
i MC at output 5 = 30 - 20 = 10
j. MC at output 6 = 48 - 30 = 18
(a) output 4 units,
( b) output 4 units ,
(c) output 5 units,
(d) output 5 units
(e) maximum output is 6 units