Sandra and Trey operate a small company that produces souvenir footballs. Their fixed cost is $2,000 per

Question:

Sandra and Trey operate a small company that produces souvenir footballs. Their fixed cost is $2,000 per month.

They can hire workers for $1,000 per worker per month.

Their monthly production function for footballs is as given in the accompanying table.

image text in transcribed

a. For each quantity of labor, calculate average variablecost (AVC), average fixed cost (AFC), average total cost (ATC), and marginal cost (MC).

b. On one diagram, draw the AVC, ATC, and MC curves.

c. At what level of output is Sandra and Trey’s average total cost minimized?

Step by Step Answer:

Related Book For  book-img-for-question

Microeconomics

ISBN: 9781319245283

6th Edition

Authors: Paul Krugman Robin Wells

Question Posted: