Suppose Marcus produces chocolate with two inputs: factory and labour. The rent of the factory is $3,000 per week, and the wage of each worker is $2,000 per week. When Marcus produces 200 pounds of chocolate every week, he employs 2 workers. Calculate the fixed cost (FC), variable cost (VC), total cost (TC), average fixed cost (AFC), average variable cost (AVC), and average total cost (ATC) of producing 200 pounds of chocolate.        The total cost of producing 201 pounds of chocolate is $7030. Calculate the marginal cost (MC) of producing the 201st pound of chocolate.

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Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.