Question: When seeing 10 patients per day, the short-run average fixed cost (SAFC), short-run average total cost (SATC) and short-run marginal cost (SMC) of operating a

When seeing 10 patients per day, the short-run average fixed cost (SAFC), short-run average total cost (SATC) and short-run marginal cost (SMC) of operating a doctor's office are $20, $70, and $60 per patient, respectively.

a) What is the short-run average variable cost (SAVC)? Show your work.

b) What is the short-run total variable cost (STVC)? Show your work.

c) What is the short-run total fixed cost (STFC)? Show your work.

d) Suppose that the daily patient load increases by one additional patient (to 11 patients per day). Using short-run cost theory, explain the impact of this additional patient on the new SAVC and SATC. Do they increase or decrease? Why? By how much? Show your calculations.

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