190k views
1 vote
Rody's firm produces trumpets in a perfectly competitive market. The table below shows Brody's total variable cl He has a fixed cost of $240, and the price per trumpet is $50.

Quantity Total Variable Cost
6 $120
7 $145
8 $165
9 $220
10 $290
11 $390

a. Calculate the average total cost of producing 8 trumpets. Show your work.

1 Answer

6 votes

Final answer:

The average total cost of producing 8 trumpets is calculated by dividing the sum of the total variable costs and fixed costs by the quantity of output, yielding $50.63.

Step-by-step explanation:

Calculation of Average Total Cost for 8 Trumpets

The average total cost (ATC) is calculated by dividing the sum of total variable costs (TVC) and fixed costs (FC) by the quantity (Q) of output. The TVC for 8 trumpets is $165, and Brody's firm has fixed costs of $240. Therefore, the ATC for 8 trumpets is calculated as follows:

ATC = (TVC + FC) / Q

ATC = ($165 + $240) / 8

ATC = $405 / 8

ATC = $50.625

The average total cost of producing 8 trumpets is $50.63 (rounded to two decimal places). This includes both variable and fixed costs.

User Mylogon
by
8.5k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories