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AZ Drone company is a small operation that produces small-scale drones for military use. The following table shows its cost. TFC=TotalFixedCostTVC=TotalVariableCostTC=TotalCostMC=MarginalCost Required: (i) Complete the
AZ Drone company is a small operation that produces small-scale drones for military use. The following table shows its cost. TFC=TotalFixedCostTVC=TotalVariableCostTC=TotalCostMC=MarginalCost Required: (i) Complete the above table by calculating the remaining TFC, TVC, TC and MC cost figures. (Note: To reproduce the table in your answer booklet.) (4 marks) (ii) Interpret the TFC and MC cost figures. (2 marks) (iii) Draw the AVC (average variable cost), ATC (average total cost) and MC (marginal cost) curves in a single diagram. (2 marks) (iv) In the long run, briefly explain what economics of scale and diseconomies of scale is. (2 marks)
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