You are thinking to start your food catering business by making rolled tacos, which are ed taquitos (corn tortillas) and flautas (flour tortillas). As suggested, one important ste mate startup costs and prepare the budget. Your estimate shows, on a daily basis, your t (FC), including rent, utility, fees and tax, is about $300 per day. Your variable cost ( gely depending on the units of labor (variable input) you are going to use. Hiring one la 1 cost you $120 per day. Use the information given, to finish the questions below. The table below presents the cost structure of your taco business. The first two colum a the number of your output or tacos (Y) and the units of labor inputs. To finish this taE ed to calculate variable cost (VC), total cost (TC), marginal cost (MC), average variable WC) and average total cost (ATC). Note: MC = ATC / AY. Output, Variable input and Costs (per day) Таcos Labor VC TC MC AVC ATC 50 1 120 420 0.00 105 165 230 288 340 385 420 8 450 9. 460 10 What is the shape of the daily marginal cost (MC) curve, the average variable cost (A ve and the average total cost (ATC) curve? And why they look like that shape? After dy to your long-run average total cost, you find it has a similar shape as the short-run C curve. Why the long-run ATC curve has such a shape? 3456
You are thinking to start your food catering business by making rolled tacos, which are ed taquitos (corn tortillas) and flautas (flour tortillas). As suggested, one important ste mate startup costs and prepare the budget. Your estimate shows, on a daily basis, your t (FC), including rent, utility, fees and tax, is about $300 per day. Your variable cost ( gely depending on the units of labor (variable input) you are going to use. Hiring one la 1 cost you $120 per day. Use the information given, to finish the questions below. The table below presents the cost structure of your taco business. The first two colum a the number of your output or tacos (Y) and the units of labor inputs. To finish this taE ed to calculate variable cost (VC), total cost (TC), marginal cost (MC), average variable WC) and average total cost (ATC). Note: MC = ATC / AY. Output, Variable input and Costs (per day) Таcos Labor VC TC MC AVC ATC 50 1 120 420 0.00 105 165 230 288 340 385 420 8 450 9. 460 10 What is the shape of the daily marginal cost (MC) curve, the average variable cost (A ve and the average total cost (ATC) curve? And why they look like that shape? After dy to your long-run average total cost, you find it has a similar shape as the short-run C curve. Why the long-run ATC curve has such a shape? 3456
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:2. You are thinking to start your food catering business by making rolled tacos, which are often
called taquitos (corn tortillas) and flautas (flour tortillas). As suggested, one important step is to
estimate startup costs and prepare the budget. Your estimate shows, on a daily basis, your fixed
cost (FC), including rent, utility, fees and tax, is about $300 per day. Your variable cost (VC) is
largely depending on the units of labor (variable input) you are going to use. Hiring one labor
will cost you $120 per day. Use the information given, to finish the questions below.
(1) The table below presents the cost structure of your taco business. The first two columns give
you the number of your output or tacos (Y) and the units of labor inputs. To finish this table, you
need to calculate variable cost (VC), total cost (TC), marginal cost (MC), average variable cost
(AVC) and average total cost (ATC). Note: MC = ATC / AY.
Output, Variable input and Costs (per day)
Таcos
Labor
VC
TC
MC
AVC
АТС
50
1
120
420
0.00
105
165
3
230
4
288
340
6.
385
420
8.
450
9.
460
10
(2) What is the shape of the daily marginal cost (MC) curve, the average variable cost (AVC)
curve and the average total cost (ATC) curve? And why they look like that shape? After some
study to your long-run average total cost, you find it has a similar shape as the short-run (daily)
ATC curve. Why the long-run ATC curve has such a shape?
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