Question

1.) At the first meeting of Mountain Sky Carvers of DaMountains (MSCD), youn and your colleagues decide to lease a warehouse that can be used as a manufacturing facility for the co-op's carved eagles. The cost of this facility is $1,000 per month. Even though this is a small mountain community composed mainly of artisans, labor is not cheap and artists are only willing to work for $2,000 a month. Fill in all the remaining columns within the table below, and round all your answers to two decimal places (cents). Plot AVC, AFC, ATC and MC on the graph.

Table includes 10 columns, the first two are filled in with information:

Labor Output APP(L) MPP(L) TVC AVC TC ATC AFC MC
1 8
2 17
3 24
4 30
5 35
6 39
7 42
8 44
9 45
10 44
11 41
Other columns are form APP to MC, respectively, where information has to be put into them.

Othe questions regarding this problem:
a) What is AVC when output equals 45 birds (carved eagles).
b) What is the MC when ouput equals 39 carved eagles?
c) Minimum average total cost occurs when how many units of labor are employed?
d) When 8 units of labor are employed marginal cost is equal to?
e) Average variable costs are equal to $364 at what level of employment?

Graph looks like:
At x axis there is output (numbers 0, 10, 20, 30, 40, 50 are noted), and at the y- axis costs are given (numbers 0, 100, 200, 300, 400, 500, 600, 700, 800, 900, 1ooo).

Answer 1

Answer on Question #52708, Economics, Microeconomics

TFC = $1000, AVC = $2000

APP(L) = Q/L, MPP(L) = ΔQ/ΔL, AVC = TVC/Q, TC = TVC + TFC, ATC = TC/Q, AFC = TFC/Q, MC = ΔTC/ΔQ

a) AVC = 400 when output equals 45 birds.

b) MC = 500 when output equals 39 carved eagles.

c) Minimum average total cost occurs when 3 units of labor are employed.

d) When 8 units of labor are employed marginal cost is equal to $1000.

e) Average variable costs are equal to $364 at 8 units of labor.

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