Question

Webby Inc. is a web development company. Webby's monthly production function for developing websites is given in the table b

Webby pays $5,000 a month in rent for office space and equipment. It pays each programmer $3,000 a month. There are no oth
production costs. Fill in the table of production costs.
Instructions: Round your answers to the nearest dollar.
Programmers Websites
0
1
2
3
4
5
6
0
2
6
14
1828
20
24
26
Variable
Cost
Total Cost
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Average
Fixed Cost
6 of 10
Average
Variable
Cost
Average
Total Cost
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Marginal
Cost

Answer 1

The table is filled with relevant cost values for Webby Inc.'s production function, considering variable costs, total costs, average fixed and variable costs, and marginal costs. The table provides insights into the cost structure at different levels of website production.

To fill in the table of production costs, we need to calculate the relevant cost values based on the given information.

1. Variable Cost (VC): The variable cost includes the cost of programmers, as each programmer is paid $3,000 per month.

2. Total Cost (TC): The total cost includes both fixed costs (rent) and variable costs (programmers' salaries).

3. Average Fixed Cost (AFC): AFC is calculated by dividing the total fixed cost (rent) by the quantity of websites produced.

4. Average Variable Cost (AVC): AVC is calculated by dividing the total variable cost (programmers' salaries) by the quantity of websites produced.

5. Average Total Cost (ATC): ATC is calculated by dividing the total cost (sum of fixed and variable costs) by the quantity of websites produced.

6. Marginal Cost (MC): MC is the additional cost incurred when producing one more unit and can be calculated as the change in total cost divided by the change in quantity.