Filling the boxes A to R in Table 4.2 is as follows:
Output Total Total Marginal Average Average
Variable Cost Cost Variable Cost Total Cost
0 $0 $10 $10 $0 $10.00
1 $10 $20 $10 $10 $20.00
2 $15 $25 $5 $7.50 $12.50
3 $17 $27 $2 $5.67 $9.00
4 $20 $30 $3 $5.00 $7.50
5 $30 $40 $10 $6.00 $8.00
How the marginal, average variable, and average total costs are computed:
The marginal cost is the addition to the total production cost when an additional unit is produced. It is the difference between current total production cost and previous total production cost.
The average variable cost is the quotient of the total variable divided by the number of units.
The average total cost is the quotient of the total cost divided by the number of units.
Output Total Total Marginal Average Average
Variable Cost Cost Variable Cost Total Cost
0 $0 $10 $10 $0 $10
1 $10 $20 $10 ($20 - $10) $10 ($10/1) $20.00 ($20/1)
2 $15 $25 $5 ($25 - $20) $7.50 ($15/2) $12.50 ($25/2)
3 $17 $27 $2 ($27 - $25) $5.67 ($17/3) $9.00 ($27/3)
4 $20 $30 $3 ($30 - $27) $5.00 ($20/4) $7.50 ($30/4)
5 $30 $40 $10 ($40 - $30) $6.00 ($30/6) $8.00 ($40/8)
Thus, the boxes have been filled as above.