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Question : Spotless Car Wash must pay $75 per day for each

Spotless Car Wash must pay $75 per day for each automated line it uses and pay its workers $60 per day. From the information in the following table, calculate:

Output Capital Labor TFC    TVC    TC       AFC    AVC    ATC    MC

     0                    1                      0    

 

    30                    1                     1    

     70                   1                     2    

    120                  1                     3    

    160                  1                      4    

    190                  1                      5    

    210                  1                      6    

a) TFC, TVC, and TC at each production level.

b) AFC, AVC, and ATC at each production level. As output increases, do theses costs behave as described in the text? What is the optimal production level?

c) MC and interpret the result.

 

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