What happens to MC after the point where it equals AVC?

Problems:

1. Below is
hypothetical data for a manufacturer which possesses a fixed plant

producing a commodity that requires only one variable
input. Total

Product is
given. Total Fixed Cost is $220 per period. Units of the

variable input
cost $100 per unit of variable input.. Complete the following table.

Units of Var. Input	T.P.	A.P.	M.P.	T.F.C.	T.V.C.	T.C.	A.F.C.	A.V.C.	A.T.C.	M.C
1	100	100.00	–
2	250	125.00	150.00
3	410	136.67	160.00
4	560	140.00	150.00
5	700	140.00	140.00
6	830	138.33	130.00
7	945	135.00	115.00
8	1050	131.25	105.00
9	1146	127.33	96.00
10	1234	123.40	88.00
11	1314	119.45	80.00
12	1384	115.33	70.00
13	1444	111.08	60.00
14	1494	106.71	50.00
15	1534	102.27	40.00
16	1564	97.75	30.00
17	1584	93.18	20.00
18	1594	88.56	10.00

1. When MP is >, what is happening to:

1) MC

2)
AVC

1. When MC first begins to fall, does AVC begin to rise?

1. What is the relation between MC and AVC when MP = AP?

1. What is happening to AVC while AP is increasing?

1. Where is AVC when AP is at its maximum? What happens to
   AVC after this point?

1. What happens to MC after the point where it equals AVC?

1)
How does it compare with AVC
thereafter?

2)
What is happening to MP thereafter?

3)
How does MP compare with AP
thereafter?

1. What happens to TFC as output is increased?

1. What happens to AFC as:

1)
MP increases?

2)
MC decreases?

3)
MP decreases?

4)
MC increases?

5)
AVC increases?

1. How long does AFC decrease?

J. What happens to
ATC as?

1)
MP increases

2)
MC decreases

3)
AP increases

4)
AVC decreases

K. Does ATC increase?

1)
As soon as the point of diminishing
marginal returns is passed?

2)
As soon as the point of diminishing
average returns is passed?