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Explanation of row #1: The fixed cost will be 500
regardless of the number of twinkies produced (0 or 1 million).
Variable cost is zero because producing 0 twinkies did NOT require
hiring any labor. Total cost is just the sum of fixed and variable
cost.
Explanation of row #2: Fixed cost is ALWAYS 500. Variable cost
now equals 25, because producing 100 twinkies required the hiring of
one worker. Total cost is the sum of fixed and variable cost.
Marginal cost is the change in total cost divided by the change in
output (therefore, 25 is the change in total cost from row 1 to row
2, and 100 is the change in output from row 1 to row 2). Average
fixed cost is fixed cost divided by output (500/100). Average
variable cost is variable cost divided by output (25/100). Average
total cost is total cost divided by output (525/100).