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Jane's Juice Bar

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Submitted By hassan84
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Chapter # 12
Question # 11 | | | | | | | | | | | | Jane's Juice Bar | | | | | | | | | | | | | QTY | VC | FC | TC | AVC | ATC | MC | | | 0 | $0 | $30 | $30 | | | | | | 1 | $10 | $30 | $40 | $10 | $40 | $10 | | | 2 | $25 | $30 | $55 | $12.5 | $27.5 | $15 | | | 3 | $45 | $30 | $75 | $15.0 | $25.0 | $20 | | | 4 | $70 | $30 | $100 | $17.5 | $25.0 | $25 | | | 5 | $100 | $30 | $130 | $20.0 | $26.0 | $30 | | | 6 | $135 | $30 | $165 | $22.5 | $27.5 | $35 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Relationship between Marginal Cost Curve and Average Total Cost Curve:
If we look at the above figure, we can easily say that whenever the MC is greater than ATC then ATC starts falling. At quantity 4, the MC = ATC and after that when MC > ATC, ATC is increasing.
Also, we can notice that MC is crossing ATC at ATC’s minimum point.

Relationship between Margal Cost Curve and Average Variable Cost Curve:
We can easily tell from above figure that when MC > AVC then AVC starts rising. This AVC curve is most associated with MC curve. As both curves move in same direction. MC = AVC at AVC’s lowest point. In this case MC = AVC at cost $10.

Question # 5
Quantity = 600
ATC = $300
Total Cost / 600 units = $180,000
Total Cost / 601 units = $180,901
Price offered for one (1) extra unit =

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