could you calulate the total, average variable, and average cost, when a company marginal cost of production is $5.00 per unit and fixed costs are $20.00
To calculate the total cost, average variable cost, and average cost, you need to have information about the quantity produced or the total units.
Let's assume the quantity produced is "q" units.
1. Total Cost (TC):
Total Cost (TC) can be calculated as the sum of fixed costs (FC) and variable costs (VC).
TC = FC + VC
In this case, fixed costs are given as $20.00 and variable costs are the product of marginal cost per unit ($5.00) and the quantity produced (q).
FC = $20.00
VC = $5.00 * q
Therefore, TC = $20.00 + ($5.00 * q)
2. Average Variable Cost (AVC):
Average Variable Cost (AVC) is calculated by dividing the total variable costs by the quantity produced (q).
AVC = VC / q
In this case, VC = $5.00 * q,
so AVC = ($5.00 * q) / q
Simplifying, AVC = $5.00
3. Average Cost (AC):
Average Cost (AC) is calculated by dividing the total cost (TC) by the quantity produced (q).
AC = TC / q
In this case, TC = $20.00 + ($5.00 * q),
so AC = ($20.00 + ($5.00 * q)) / q
Simplifying, AC = ($20.00 / q) + $5.00
Note: These calculations assume that the fixed costs and the marginal cost per unit remain constant regardless of the quantity produced.
So, to calculate the total cost, average variable cost, and average cost, you need to know the value of "q".