Economics 11th Edition by William McEachern

Exercise 17

RELATIONSHIP BETWEEN MARGINAL COST AND AVERAGE COST Assume that labor and capital are the only inputs used by a firm. Capital is fixed at 5 units, which cost $100 each per day. Workers can be hired for $200 each per day. Complete the following table to show average variable cost ( AVC ), average total cost ( ATC ), and marginal cost ( MC ).