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Costs. a. Complete the following table.
Total Product (Q)
Total Fixed Cost
Total Variable Cost
Total Cost
Average Fixed Cost
Average Variable Cost
Average Total Cost
Marginal Cost
0
$60
$0
-
1
$105
2
$85
3
$120
4
$150
5
$245
6
$225
7
$330
8
$325
9
$390
10
$525
b. Draw one graph of ATC, AVC and MC. Draw another graph with TC.
c. What happens to ATC as Q increases?
d. Where does MC cross AVC? ATC?
e. Suppose fixed costs increase by $20. How will this affect TFC, TVC, TC, ATC, AVC and MC? Which numbers change and which stay the same?
f. Suppose raw material prices increase by 20%. How will this affect TFC, TVC, TC, ATC, AVC and MC?
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