Question
Quantity of staff Quantity of coffees made Fixed cost (rent) Variable cost (wages) Total cost Average total cost Marginal cost 0 0 $70.00 $0.00 $70.00
| Quantity of staff | Quantity of coffees made | Fixed cost (rent) | Variable cost (wages) | Total cost | Average total cost | Marginal cost |
| 0 | 0 | $70.00 | $0.00 | $70.00 | $0.00 | $0.00 |
| 1 | 30 | $70.00 | $200.00 | $270.00 | $9.00 | $6.67 |
| 2 | 70 | $70.00 | $400.00 | $470.00 | $6.71 | $5.00 |
| 3 | 130 | $70.00 | $600.00 | $670.00 | $5.15 | $3.33 |
| 4 | 170 | $70.00 | $800.00 | $870.00 | $5.12 | $5.00 |
| 5 | 200 | $70.00 | $1,000.00 | $1,070.00 | $5.35 | $6.67 |
Question 3a.Graph the marginal cost (MC) curve and the average total cost (ATC) curve on a diagram. Remember to label the curves and the axes fully. (0.5 marks)
Question 3b.State clearly the relationship between marginal cost and average total cost. (0.5 marks)
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A Course In Environmental Economics
Authors: Daniel J Phaneuf, Till Requate
1st Edition
1316866815, 9781316866818
