Webby Inc. is a web development company. Webby’s monthly production function for developing websites is given in the table below
. Webby pays $4,000 a month in rent for office space and equipment. It pays each programmer $3,000 a month. There are no other production costs. Fill in the table of production costs.
1 answer:
Answer and Explanation:
The computation of the filling of the given table for the production cost is shown in the attachment below:
As we know that
Total cost = Fixed cost + variable cost
Average fixed cost = fixed cost ÷ websites
Average Variable cost = Variable cost ÷ websites
Therefore the average total cost is
= Average fixed cost + average variable cost
The marginal cost is
= Change in total cost ÷ change in quantity
These formulas are used to complete the table as given below.
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