Use the Figure 1 to answer these questions:

a) At 200 units of output, find the following costs:

i). AFC = __________ v). TVC = __________

ii). AVC = __________ vi). TC = __________

iii). ATC = __________ vii). SMC = __________

iv). TFC = __________

b) At 600 units of output, find the following costs:

i). AFC = __________ v). TVC = __________

ii). AVC = __________ vi). TC = __________

iii). ATC = __________ vii). SMC = __________

iv). TFC = __________

(14 marks)

c) Explain the difference between short run and long run. (6 marks)