Explain why do the average variable cost curve and the, Ask an Expert

Economics

Use the following table to perform the tasks below.

Quantity TFC TC TVC AFC ATC AVC MC
0 --- --- --- ---
1 50
2 400 200 75
3 700
4 950
5 250 2000

a. Fill in the table above. Carry the calculations to one decimal.

b. Assume this is a firm in perfect competition and the average revenue from the sale of 4 items is $100 per item sold. How many items should be produced? Why do you say this?

c. Explain why do the Average Variable Cost curve and the Average Total Cost curve become closer as the quantity increases?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9224740

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