Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
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The table presented is a cost analysis for different quantities (Q) produced. Here is a detailed breakdown of the values given in each column:

1. **Q (Quantity):** Represents the number of units produced.
   - Ranges from 0 to 6.

2. **FC (Fixed Cost):** Costs that do not change with the level of output.
   - These values are not provided in the table.

3. **VC (Variable Cost):** Costs that vary with the level of output.
   - For 2 units, VC is 300.
   - For 3 units, VC is 270.
   - For 5 units, VC is 480.
   - For 6 units, VC is 510.

4. **TC (Total Cost):** The sum of fixed and variable costs.
   - For 2 units, TC is 300.

5. **MC (Marginal Cost):** The additional cost of producing one more unit.
   - For 2 units, MC is 100.
   - For 4 units, MC is 40.

6. **AFC (Average Fixed Cost):** Fixed Cost per unit.
   - For 5 units, AFC is 15.

7. **AVC (Average Variable Cost):** Variable Cost per unit.
   - For 2 units, AVC is 105.
   - For 4 units, AVC is 77.5.

8. **ATC (Average Total Cost):** Total Cost per unit.
   - For 2 units, ATC is 120.

The table does not provide the fixed costs explicitly; hence, some cells are left empty. The table is designed to help understand the relationship between production levels and costs, such as variable costs, marginal costs, and average costs.
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Transcribed Image Text:The table presented is a cost analysis for different quantities (Q) produced. Here is a detailed breakdown of the values given in each column: 1. **Q (Quantity):** Represents the number of units produced. - Ranges from 0 to 6. 2. **FC (Fixed Cost):** Costs that do not change with the level of output. - These values are not provided in the table. 3. **VC (Variable Cost):** Costs that vary with the level of output. - For 2 units, VC is 300. - For 3 units, VC is 270. - For 5 units, VC is 480. - For 6 units, VC is 510. 4. **TC (Total Cost):** The sum of fixed and variable costs. - For 2 units, TC is 300. 5. **MC (Marginal Cost):** The additional cost of producing one more unit. - For 2 units, MC is 100. - For 4 units, MC is 40. 6. **AFC (Average Fixed Cost):** Fixed Cost per unit. - For 5 units, AFC is 15. 7. **AVC (Average Variable Cost):** Variable Cost per unit. - For 2 units, AVC is 105. - For 4 units, AVC is 77.5. 8. **ATC (Average Total Cost):** Total Cost per unit. - For 2 units, ATC is 120. The table does not provide the fixed costs explicitly; hence, some cells are left empty. The table is designed to help understand the relationship between production levels and costs, such as variable costs, marginal costs, and average costs.
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