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    Exercise Production Cost - Week 10

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    Suzana binti ithnain - PNS
    The document contains 6 theory questions about cost and production for a firm. It includes tables to complete with information on total, average, and marginal costs at different output levels. It also asks students to determine if the firm is operating in the short run or long run based on the cost structures, and to draw relevant cost curves.

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    Exercise Production Cost - Week 10

    Uploaded by

    Suzana binti ithnain - PNS
    73 views3 pages
    The document contains 6 theory questions about cost and production for a firm. It includes tables to complete with information on total, average, and marginal costs at different output levels. It also asks students to determine if the firm is operating in the short run or long run based on the cost structures, and to draw relevant cost curves.

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    CLASS tutorial

    Original Title

    Exercise Production Cost.week 10

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    The document contains 6 theory questions about cost and production for a firm. It includes tables to complete with information on total, average, and marginal costs at different output levels. It also asks students to determine if the firm is operating in the short run or long run based on the cost structures, and to draw relevant cost curves.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    73 views3 pages

    Exercise Production Cost - Week 10

    Uploaded by

    Suzana binti ithnain - PNS
    The document contains 6 theory questions about cost and production for a firm. It includes tables to complete with information on total, average, and marginal costs at different output levels. It also asks students to determine if the firm is operating in the short run or long run based on the cost structures, and to draw relevant cost curves.

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    © All Rights Reserved
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    EXERCISE (week 10 )

    THEORY COST AND PRODUCTION

    Answer all question below;

    1. a. Complete the following table


    Output TVC (RM) TC (RM) MC (RM) AC ( RM) AVC AFC
    (unit) (RM) (RM)
    1 100 150
    2 160 105
    3 200 83.34
    4 260 77.50
    5 340 78
    6 440 81.70
    7 560 87.14
    8 700 93.75

    b. what is the fixed cost faced by the firm?


    c. Suppose that the firm decided to increase its production from 5 to 6 units, how will this
    affect total cost?
    d. Draw a graph without scale to show the relationship between AP, MP and AVC, MC

    2. a. Complete the following table


    Output TFC TVC TC AFC AVC AC MC
    (unit)
    0 50
    10 50 10
    25 50 70
    45 50 0.67
    70 50 0.4
    105 50 50
    135 50 110
    155 50 0.45
    170 50 0.67
    180 50 140
    180 50 150 0.56

    b. Draw the AFC, AVC and AC in a graph without scale


    c. Is the firm operating in the short run or long run? Why?
    3. a. Complete the following table
    Total Average Average cost Total cost Average Marginal
    product Variable fixed cost cost
    Cost
    0 500 -
    1 700 200
    2 100
    3 250
    4 400
    5 510

    a. Draw the AFC, AVC and AC in a graph


    b. Is the firm operating in the short run or long run? Why?

    4. a) In the short run, the following costs were incurred by a chocolate factory. State whether
    each costs is a fixed cost or variable cost.
    i. salary of top management
    ii. Assessment rates of a building
    iii. Costs of electricity (operation of machines)
    iv. Interest on loan
    v. Wages of unskilled workers

    b) The following graph shows the long run and short run average costs curves of a firm

    In the long run, which plant size should be used, if the firm wants to produce 200 and 400
    units of output
    5. a) Complete the following table

    Output TFC TVC TC MC AFC AVC AC


    0 60
    1 100
    2 120
    3 80
    4 400
    5 500

    b) is the firm operating in the short run or long run? Why?


    c) Sketch the following curves in a graph
    i. Average fixed cost
    ii. Average variable cost
    iii. Average cost
    iv. Marginal COST

    6. a) Complete the following table


    Output TC TFC TVC AC AFC AVC MC
    0 300 300
    1 330 300
    2 380 300
    3 450 300
    4 540 300
    5 650 300
    6 780 300
    7 930 300
    8 1100 300
    9 1290 300
    10 1500 300

    b) is the firm operating in the short run or long run? Why?


    c) Sketch the following curves in a graph
    i. Average fixed cost
    ii. Average variable cost
    iii. Average cost
    iv. Marginal COST

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