Question

the flying elvis copter rides quantity total cost fixed cost variable cost marginal cost average fixed cost average variable cost average total cost 0 $50 $50 $0 -- -- -- -- 1 $150 a b c d e f 2 g h i $120 j k l 3 m n o p q $120 r what is the value of e? 1. $25 2. $100 3. $50 4. $150

Answer 1

Unable to calculate the exact value of e (average variable cost) for the first unit of production without the explicit variable cost. The average variable cost is obtained by dividing the total variable cost by the quantity of output.

Step-by-step explanation:

The value of e, which represents the average variable cost (AVC) for the first unit of production in the flying elvis copter rides, can be determined by dividing the variable cost by the quantity of output. As the provided information does not include the explicit variable cost for the first unit, we are unable to calculate the exact value of e.

However, to clarify the concept with an example: if the variable cost of producing 80 haircuts is $400, then the AVC would be $400/80, equating to $5 per haircut.

At the given output level, the AVC curve will always lie below the average total cost (ATC) curve because ATC includes both AVC and average fixed cost (AFC). Over time, as production increases, the AVC may get closer to the ATC as fixed costs spread over a larger number of units, therefore, becoming less significant per unit.

Answer 2

The average variable cost (e) for 1 flying Elvis copter ride is calculated by dividing the variable cost by the quantity of output, resulting in $100.

Step-by-step explanation:

To find the value of e, which represents the average variable cost (AVC) for 1 flying Elvis copter ride, we follow the concept that AVC is obtained by dividing the variable cost by the quantity of output. In the provided table, the total cost for 1 copter ride is $150, and the fixed cost (which does not change with output) is $50. Therefore, the variable cost for 1 copter ride can be calculated by subtracting the fixed cost from the total cost ($150 - $50 = $100). The quantity of output for e is 1 ride. Thus, the average variable cost (e) would be $100 divided by 1 ride, which results in an AVC of $100.