How do you find the average variable cost:

output: 0 1 2 3 4 5 6 7 8

total cost: 50 55 62 75 96 125 162 203 248

average total cost: - 55 31 25 24 25 27 29 31

marginal cost: - 5 7 13 21 29 37 41 45

LO8-5 10. A firm has leased plant and equipment to produce video game cartridges, which can be sold in - - - unlimited quantities at $21 each. The following figures describe the associated costs of production: Rate of output (per day) 0 1 2 3 4 5 6 7 8 Total cost (per day) $50 $55 $62 $75 $96 $125 $162 $203 $248 (a) How much are fixed costs? (b) Draw total revenue and cost curves on the graphs here. (c) Draw the average total cost (ATC), marginal cost (MC), and demand curves of the firm. (d) What is the profit-maximizing rate of output? (e) Should the producer stay in business? (f) What is the size of the loss if production continues? (g) How much is lost if the firm shuts down? Total Revenues and Costs Price, ATC, and MC $250 $60 200 50 40 150 PRICE OR COST (dollars per cartridge) REVENUE OR COST (dollars per day) 30 100 20 50 10 0 1 2 3 4 5 6 7 8 0 1 2 3 4 6 7 8 OUTPUT (cartridges per day) OUTPUT (cartridges per day)