Table 9.3
$\begin{array}{|c|c|c|c|c|}
\hline \begin{array}{c}
\text { Quantity of } \
\text { Lanterns }
\end{array} & \begin{array}{c}
\text { Fixed Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Average Total Cost } \
\text { (dollars) }
\end{array} \
\hline 75 & 200 & 170 & 370 & 4.93 \
\hline 80 & 200 & 230 & 430 & 5.36 \
\hline 90 & 200 & & & 7.67 \
\hline 100 & 200 & 810 & & \
\hline 115 & 200 & & & 11.8 \
\hline 117 & 200 & 1264 & 1464 &12.5 \
\hline 120 & 200 & 1480 & & \
\hline
\end{array}$
Table 9.3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 9.3.What is the average variable cost per unit of production when the firm produces 90 lanterns?

Question

Table 9.3
 $\begin{array}{|c|c|c|c|c|}
\hline \begin{array}{c}
\text { Quantity of } \
\text { Lanterns }
\end{array} & \begin{array}{c}
\text { Fixed Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Average Total Cost } \
\text { (dollars) }
\end{array} \
\hline 75 & 200 & 170 & 370 & 4.93 \
\hline 80 & 200 & 230 & 430 & 5.36 \
\hline 90 & 200 & & & 7.67 \
\hline 100 & 200 & 810 & &  \
\hline 115 & 200 & & & 11.8 \
\hline 117 & 200 & 1264 & 1464 &12.5 \
\hline 120 & 200 & 1480 & & \
\hline
\end{array}$ 
Table 9.3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 9.3.What is the average variable cost per unit of production when the firm produces 90 lanterns?

Quizplus · Accepted Answer

The average variable cost (AVC) is calculated by dividing the total variable cost by the quantity of output. For 90 lanterns, the total cost is not given, but the average total cost (ATC) is $7.67. Since ATC = (Fixed Cost + Variable Cost) / Quantity, and Fixed Cost is $200, we can find the Variable Cost and then divide by 90 to find AVC. The calculation shows AVC is $5.44.

Table 93 Table 93 Shows Cost Data for Lotus Lanterns, a Producer of Lanterns