Question

1. A soft-drink manufacturer can produce 1000 case of soda in a week at a total cost of GHC6,000, and 1,500 cases of soda at a cost of GHe8,500. Fid the manufacturer's weekly fixed costs and marginal cost per case of soda.​

Answer 1

To find the manufacturer's weekly fixed costs and marginal cost per case of soda, we can use the following equations:

Total Cost = Fixed Cost + Variable Cost

Variable Cost = Marginal Cost * Quantity

At 1000 cases of soda, the variable cost is GHC6,000, and the total cost is GHC6,000. So the fixed cost at this quantity can be found as:

Fixed Cost = Total Cost - Variable Cost
Fixed Cost = GHC6,000 - (1000 * GHC6/1000) = GHC6,000 - GHC6 = GHC0

This means the manufacturer has no fixed costs at this quantity of 1000 cases.

Next, we can find the marginal cost per case of soda by calculating the change in the variable cost as the quantity changes from 1000 to 1500 cases.

Variable Cost = Total Cost - Fixed Cost
Variable Cost = GHC8,500 - GHC0 = GHC8,500

Marginal Cost = (Variable Cost at 1500 cases - Variable Cost at 1000 cases) / (1500 - 1000)
Marginal Cost = (GHC8,500 - GHC6,000) / 500 = (GHC2,500) / 500 = GHC5

So the manufacturer's marginal cost per case of soda is GHC5.

Note: The fixed cost is assumed to be zero because the information provided does not specify any fixed costs. This may not necessarily be the case in a real-world scenario.