Section - Production Costs
|
Quantity of toys produced (in thousands)
|
Variable costs of production
|
Fixed costs of production (per hour)
|
Total costs of production
|
Average variable cost
|
Average fixed cost
|
Average total cost
|
Marginal cost of production
|
|
0
|
|
|
$30
|
--
|
--
|
--
|
--
|
|
1
|
10
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
27.5
|
15
|
|
3
|
|
|
|
15
|
|
|
|
|
4
|
70
|
|
100
|
|
|
|
25
|
|
5
|
|
|
|
20
|
|
26
|
|
|
6
|
135
|
|
|
|
|
|
|
Toy Factory
Complete the chart. What is the total cost of production when 2000 toys are produced? What is the variable cost of production when 5000 toys are produced? What is the fixed cost of production when 5000 toys are produced? What is the average total cost when 5000 toys are produced? What is the marginal cost when 3000 toys are produced? What is the marginal cost when 6000 toys are produced? What is the minimum-cost output for the toy factory? Is this firm operating in the short run or the long run? Why is important for a company to know what its average total cost per item is? Why does the average fixed cost always fall?