Calculating also graphing AFC, AVC, ATC also MC.

An industry has fixed costs of $60 also variable costs as indicated in the table on the following page. A industry has fixed costs of $60 also variable costs as indicated in the table on the following page.

a. Graph total fixed cost, total variable cost also total cost. Elucidate how the law of diminishing returns influences the shapes of the variable-cost also total-cost curves.

b. Graph AFC, AVC, ATC also MC. Elucidate the derivation also shape of every of these four curves also their relationships to one another. Specifically, elucidate in nontechnical terms Elucidate why the MC curve intersects both the AVC also the ATC curves at their minimum points.

c. Elucidate how the location of every curve graphed in problem 7b would be altered if (1) total fixed cost had been $100 rather than $60 also (2) total variable cost had been $10 less at every level of output.

Total Product Total Fixed Cost Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost

0 $___ $0 $___ $___ $___ $___ $___
1 ___ 45 ___ ___ ___ ___ ___
2 ___ 85 ___ ___ ___ ___ ___
3 ___ 120 ___ ___ ___ ___ ___
4 ___ 150 ___ ___ ___ ___ ___
5 ___ 185 ___ ___ ___ ___ ___
6 ___ 225 ___ ___ ___ ___ ___
7 ___ 270 ___ ___ ___ ___ ___
8 ___ 325 ___ ___ ___ ___ ___
9 ___ 390 ___ ___ ___ ___ ___
10 ___ 465 ___ ___ ___ ___ ___