The output and cost of production of rice (in bags) are presented in the table below. Use the information in the table to answer the questions that follow:
Output of rice (in bags |
0 |
1 |
2 |
3 |
4 |
Total Variable
Cost(TVC) $ |
0 |
5 |
7 |
10 |
20 |
Total Cost(TC) $ |
7 |
12 |
14 |
17 |
27 |
Calculate the
Average Fixed Cost (AFC) at output levels 0, 2 and 4.
Marginal Cost (MC) at all levels of output.
If the price of a bag of rice were $ 10,
calculate the profit/loss at all levels of output.
at what output level(s) is the maximum profit made?
Draw the marginal cost curve (the use of graph is essential).