define and calculate the remaining six major cost elements of a business, when given the total costs and the quantity produced, as well as use the computed costs to determine a minimum cost output level for that business. In addition, you will also clearly explain how the average total cost of a new output level is affected by its share of fixed costs and variable costs.

Questions

1. When ONLY Total Costs (TC) are known, explain how to calculate each of the following:

a. Fixed Costs (FC) (1 point)

b. Variable Costs (VC) (1 point)

c. Average Variable Costs (AVC) (1 point)

d. Average Total Costs (ATC) (1 point)

e. Average Fixed Costs (AFC) (1 point)

f. Marginal Costs (MC) (1 point)

2. Table 1 shows the hourly production and Total Cost estimates for a new manufacturing firm wishing to enter the smartphone market. Fill in the blank cells in columns a., b., c., d., and e. on the table by computing the appropriate values.

Table 1