#Average Fixed Costs (AFC)

[unicornheadnebula]

Economics Formulas

Microeconomics Formulas Total Revenue (TR): Calculated as Price (P) multiplied by Quantity (Q). It’s the total income a firm receives from selling its goods or services. Marginal Revenue (MR): The additional revenue gained from selling one more unit. It’s the change in TR divided by the change in Q. Average Revenue (AR): TR divided by Q. It’s the revenue per unit sold, essentially the price of…

[goldenlaquer]

Just as I was studying for my finals in finance the initials of average fixed cost reminded me of another afc... (that I happen to miss a lot :'[ )

not this bringing me a pang of longing 😭 it's been a long while since the last AFC meeting huh :')

[jorissportsstories]

Welcome back to Jori’s Sports Stories! After a small hiatus, we are back and better than ever! We are starting back with my personal opinions on all the NFL teams post-NFL Draft and Free Agency. Today we are starting with the AFC North, which consists of The Baltimore Ravens, Cincinnati Bengals, Cleveland Browns, and Pittsburgh Steelers. I will be giving my thoughts on each team and whatever headlines surround them. Between what they need to work on, and what they have addressed. At this point teams are already in OTA’s or minicamps, so the waiting game is just beginning. Let us start our analysis.

The Baltimore Ravens, both on the field and on paper have shown themselves to be quite the squad. However, their regular season success is not translating to postseason success right now. Too many times does this team come out firing on all cylinders in October, to end up on their couches come January and February. What will it take to get this team over the playoff hump? Because what is the point of consistently reaching the playoffs if all you are going to do is constantly underperform and underwhelm. They are consistent with drafting well and playing well, but again when it comes to crunch time, they are often on the outside looking in. Also, these teams are starting to figure out how to make this Ravens offense sputter. Defenses are starting to figure out, that if you stifle Lamar Jackson’s ability to run the football, you also handicap his ability to throw the ball. It tends to be just a tad bit high, or a tad bit out of touch, and then when you disrupt his legs, he begins to turn the ball over. And now he does not have Hollywood Brown in an offense that is already not wide-receiver conducive. But I cannot blame everything on the offense, the defense and coaching has a large slice of this pie as well. That Ravens defense last year was horrible. And I am not considering of Covid and Injuries, which are no longer valid excuses in my eyes. This Baltimore Ravens defense ranked thirty out of 32. Which is not very good at all, it’s quite pathetic. But its due to the pass defense. Last year opposing quarterbacks averaged a 128 point something QBR out of one hundred against them. They were throwing clinics against this secondary. That secondary made everybody look like Tom Brady.

These Ravens have had problems with depth. Excellent starters, but with backups and situational players that are of a questionable caliber. This year I expect a healthy and non-porous defense.

Another thing, coaching wise, they are among the best coached. However, there has been a few times recently where complacency and the lack of adjustments have cost this team some games. Can the Ravens please fix that? Can they balance the system so that when Lamar’s legs get stifled, the whole team does not lose their minds?

In conclusion, for the Ravens I have somewhat high expectations for them. But who knows, I will probably wait until the middle of the season to make a definite outlook on them.

 

Next team up, The Cleveland Browns…aka the hot mess of the NFL. When we talk about the Cleveland Browns, we are always talking about something being wrong. Or what they must improve on. This is an organization that has always been a hot mess if I have been living on this earth. Both on and off the field this team is clearly not one of the better run organizations in this league.

I believe that pending a DeShaun Watson suspension, that this team has most of the components it needs to be successful in this league. Or at least competitive in a “traditional tough” division. But another thing that these Browns need to do is to try to stay out of the media for derogatory reasons. I know, its kind of hard with the world being more sensitive and everything, but still, owners, players, coaches etc., need to understand that the Cleveland Brows brand isn’t very good right now, and that they don’t need to make it any worse by committing further foolishness.

But this is what the Cleveland Browns should focus on…

A. Moving on from Baker Mayfield.

a. I am quite curious as to why he is still on the roster. Yet, this team has made other commitments at the quarterback position. That does not make any sense, and its way after the draft, so any compensation would be in the form of players, and future draft capital. From what I’m hearing it’s the fact that they want to find a partner that does not require for the Browns to pay any part of Baker Mayfield’s salary. If that’s the case, then flat out release him. But the Browns would like compensation.

b. Stop being weird Cleveland and move on.

Once the Baker Mayfield saga and the outcome of the Deshaun Watson occurs when he gets suspended, the Cleveland Browns should try their damnedest to stay out of media headlines for negative reasons.

Talking about football now, most of Cleveland’s issues last year were on the offensive side of the football. That Cleveland defense is beginning to come together as a unit. They traded away Odell Beckham Jr, and their woes offensively continued. Bakers was playing the worst football in his life, due to injury, and him already being quite turnover prone, and having accuracy issues. So, the Browns, decide to move on in a different direction with Deshaun Watson, they then signed Amari Cooper, and with how “balanced” that they drafted and their various other signings, they should be equipped to win now and win in the future.

However, I also expect the NFL to suspend DeShaun Watson for at least an entire season for his egregious, and predatory behavior. So, this team will be evaluated based on Deshaun Watson’s ability probably after next year. But as of right now, they’re pretty decent.

Next up: Blitzburgh (Pittsburgh Steelers), who have for the past few years slowly fallen into mediocrity. It all started with Big Ben’s decline, amongst other issues. Between, diva tendencies, and attention-seeking wide receivers, to just being a flawed team in general.

But when, I was a little girl, the Steelers are almost always apart of the elite teams. Mind you, I grew up around the tail end of Ray Lewis’ and Ed Reed’s careers. I am old enough to remember watch Troy Polamalu, a prime Big Ben, and an unproblematic Antonio Brown. So, what happened? Well, the ageing of Big Ben and that system. They couldn’t run the ball efficiently, and Big Ben was pretty much immobile, and his arm strength was visibly declining. Opposing teams were stopping the run and making Ben beat them with his arm, which he could while throwing a lot of passes, but was not very efficient at throwing the ball anymore. This team has the most uncertainty at the quarterback position. We all know Mason Rudolph isn’t a superstar, I am not completely sold on Mitchell Trubisky, and Kenny Pickett is just a rookie. They’ve got to be able to run the football, and they have got to be able to score touchdowns this upcoming season. And keep that defense fresh and not worn down and exhausted. This offense needs to be able to put together and sustain drives.

In conclusion, this team is in a serious rebuild upcoming. I still have them being competitive, but it will be interesting to watch the direction that this teams heads in. When they re-establish their offense, re-vitalize their defense, they’ll be back to being elite in no time.

Next up, the Cincinnati Bengals, the Super Bowl runner-ups. They’ve actually improved the one thing that really should have cost them some games which is that offensive line. That offensive line was so horrible and was playing “Red Rover” and letting everybody else over. That offensive line was as porous as a piece of Swiss cheese. The rest of the squad has improved as well. With Joe Burrow and those wide receivers, its no doubt that Cincinnati is here. But for how long until teams start figuring them out? That’s when it gets interesting. They’ve addressed their glaring needs, but they need not get complacent or too comfortable.

In conclusion, I believe that the AFC North is still one of the toughest divisions in football. However, I’m quite uncertain about both Cleveland and Pittsburgh. The Ravens have got to make a deep playoff run sooner rather than later. And Cincy is top dog in that division as of right now.

[clockworkcreations]

This module introduces several different cost curves. These cost curves are inte

This module introduces several different cost curves. These cost curves are inte

This module introduces several different cost curves. These cost curves are interrelated. Explain the shape of the average fixed cost curve (AFC) and how the AFC contributes to the relationship between the average total cost curve (ATC) and the average variable cost curve (AVC). Explain the shape of the marginal cost (MC) curve and how it relates to the average total cost curve and average…

[wellesleytco]

This module introduces several different cost curves. These cost curves are inte

This module introduces several different cost curves. These cost curves are inte

This module introduces several different cost curves. These cost curves are interrelated. Explain the shape of the average fixed cost curve (AFC) and how the AFC contributes to the relationship between the average total cost curve (ATC) and the average variable cost curve (AVC). Explain the shape of the marginal cost (MC) curve and how it relates to the average total cost curve and average…

[margdarsanme]

NCERT Class 12 Micro Economics Chapter 6 Cost

NCERT Class 12 Micro Economics Solutions 

Chapter 6 Cost 

NCERT TEXTBOOK QUESTIONS SOLVED : Question 1. Briefly explain the concept of the cost function.[1 Mark]

Answer: Cost function shows functional relationship between output and cost of production. It gives the least cost combination of inputs corresponding to different levels of output. Cost function is given as: C = f (X), ceteris paribus, where, C = Cost and X = Output Question 2. What are total fixed cost, total variable cost and total cost of a firm? How are they related? Or Draw TVC, TC, and TFC curves in a single diagram. [AI 2012][CBSE Sample Paper 2013][3 Marks]

Answer: (i) TC is divided into two parts TFC and TVC such that TC = TFC + TVC. (ii) TFC is the overhead cost and it remains constant or fixed whatever be the level of output. TFC curve is a horizontal line parallel to the x-axis. (iii) TVC is cost due to increased use of variable factors like raw material, labour, etc. TVC is inverse S-shaped starting from the origin due to law of variable proportion. (iv) TC is aggregate of TFC and TVC. TC curve is inverse S-shaped starting from the level of fixed cost. The reason behind it shape is the law of variable proportion.

Question 3. What are the average fixed cost, average variable cost and average cost of a firm? How are they related?[3-4 Marks]

Answer: AFC: The per unit cost incurred on fixed factors of production is known as average fixed cost.

AFC always decreases as the firm increases the level of production. AVC: It is variable cost per unit of output produced.

 It is obtained by dividing the total variable cost by the quantity of output. AVC initially decreases. But after reaching the stage of minimum cost it starts increasing. AVC is U-Shaped. AC: It is cost per unit of output produced. It can be obtained by dividing the total cost by the quantity of output produced. Relationship between AFC, AVC and AC. There is a unique relationship among AC, AFC and AVC. AC is the sum of AFC and AVC, i.e., AC = AFC + AVC. Question 4. Can there be some fixed cost in the long run? If not, why? [1 Mark]

Answer: No, there are no fixed costs in the long run as all the factors become variable. Fixed cost exists only in short run. Question 5. What does the average fixed cost curve look like? Why does it look so?[3 Marks] Or How does AFC behave as output is increased? [CBSE 2009C] Or What is the behaviour of average fixed cost as output increases? [CBSE 2012]

Answer: The shape of AFC is downward sloping Rectangular hyperbola. AFC falls as output increases because

  and TFC remains Output constant. 

So, as output increases, TFC remains constant, but AFC falls. Question 6. What do the short run marginal cost, average variable cost and short run average cost curves look like?[1 Mark]

Answer: The Short run marginal cost, average variable cost and short run average cost curves are U-shaped because of Law of variable proportion. Question 7. Why does SMC curve cut AVC curve at the minimum point of AVC curve?[3 Marks]

Answer: (i) It happens because when AVC falls, SMC is less than AVC. (ii) When AVC starts rising, SMC is more than AVC. (iii) So, it is only when AVC is constant and at its minimum point, that SMC is equal to AVC. Therefore, SMC curve cuts AVC curve at its minimum point. Question 8. At which point does the SMC curve cut the SAC curve? Give reason in support of your answer.[3 Marks]

Answer: (i) It happens because when SAC falls, SMC is less than SAC. (ii) When SAC starts rising, SMC is more than SAC. (iii) So, it is only when SAC is constant and at its minimum point, that SMC is equal to SAC. Therefore, SMC curve cuts SAC curve at its minimum point. Question 9. Why is the short run marginal cost curve U- Shaped? [3 Marks]

Answer: Marginal cost is U-shaped because of Law of variable proportion:

(i) As we know the shape of MC depends on the shape of TVC or TC. Let us suppose TVC. (ii) Initially, TVC increases at a diminishing rate (Total Product increases at Increasing rate), which makes the gap of TVC, i.e. MC to fall. (iii) Thereafter, TVC increases at an increasing rate( Total Product increases at diminishing rate) which makes the marginal cost to rise. (iv) So, from inverse S-shape TVC curve, we derive U-shape MC curve. Question 10. What do the long run marginal cost and average cost curves look like?

Answer: Out Of Syllabus. Question 11. The following table shows the total cost schedule of a firm. What is the total fixed cost schedule of this firm? Calculate the TVC, AFC, AVC, SAC and SMC schedules of the firm.[6 Marks]

Answer: The total fixed cost will be the same at all the levels of output ranging from zero to six. For zero output, total cost is ? 10. At zero output, total variable cost will be zero. Hence, Rs. 10 represents total fixed cost at all levels of output.

Question 12. The following table gives the total cost schedule of a firm. It Is also given that the average fixed cost at 4 units of output is Rs. 5.

Find the TVC, TFC. AVC, AFC, SAC and SMC schedules of the firm for the corresponding values of output.[6 Marks]

Answer:

Question 13. A firm’s SMC schedule is shown in the following table. The total fixed cost of the firm is Rs. 100.

Find the TVC, TC, AVC and SAC schedules of the firm.[6 Marks] Answer:  

MORE QUESTIONS SOLVED

I. Very Short Answer Type Questions (1 Mark) Question 1. Give the meaning of cost.Or [CBSE 2007] What is meant by cost in economics? [CBSE, Sample Paper 2010} Or What does ‘cost’ mean in economics? [CBSE 2008]

Answer: Cost of producing a good, in economics, is the sum total of explicit cost, implicit cost and certain minimum profit (normal profit). Question 2. Give two examples of fixed cost.[ CBSE 2013]

Answer: (i) Rent of the building. (ii) Salary of permanent employees. Question 3. Give two examples of variable costs.

Answer: (i) Raw materials. (ii) Labour engaged on production. Question 4. Why is average total cost greater than average variable cost?

Answer: Because AC is sum total of AFC and AVC. Question 5. What is meant by total cost?

Answer: During production the expenditure incurred on various factors of production is known as total cost. Question 6. Why are TC and TVC curves parallel to each other?

Answer: TC and TVC curves are parallel to each other because the vertical gap between them represents TFC which remains constant at all levels of output. Question 7. How does the total fixed cost change when output changes? [CBSE 2003]

Answer: Total fixed cost does not change with the change in output. Question 8. Give the meaning of marginal cost. [CBSE, Sample Paper 2010]

Answer: The cost incurred on additional unit of output is known as Marginal cost. Question 9. How is MC related to TFC?

Answer: MC is independent (not related) of TFC and is affected by change in only TVC. Question 10. How is TVC derived from MC schedule?

Answer: TVC = SMC Question 11. What does the area under marginal cost curve show?

Answer: Area under marginal cost curve shows total variable cost. Question 12. Can AC be less than MC when AC is rising?

Answer: Yes, AC can be less than MC, when AC is rising, as long as MC is more than AC. Question 13. When AC curve slopes downwards, what will be the position of MC curve?

Answer: MC curve is below AC curve. Question 14. What happens to AC when MC is equal to AC?

Answer: AC is constant and at its minimum point. Question 15. Can AC and AVC curves touch each other?

Answer: No, because difference between AC and AVC is AFC and AFC can never be zero. Question 16. Give two examples of explicit cost.

Answer: The two examples are: 

(i) Wages to worker by a firm, and 

(ii) rent to landlord by a firm. Question 17. Give two examples of implicit cost of a firm.

Answer: The two examples are: (i) imputed cost of the seller’s self-owned shop; and (ii) imputed cost of family labour being used free by the seller. Question 18. What is the behaviour of Total Variable Cost, as output increases? [AI 2012]

Answer: TVC first increases at a diminishing rate and then increases at an increasing rate. Question 19. If it is given that the total variable cost for producing 15 units of output is Rs. 3000 and for 16 units is Rs. 3,500. Find the value of Marginal Cost. [CBSE, Sample Paper 2016]

Answer: MCn = TVCn-TVCn-1 MC16 =TVC16 – TVC15 =3500 – 3000 =500

II. Multiple Choice Questions (1 Mark)

Question 1. Which cost increases continuously with the increase in production? (a) Average cost, (b) Marginal cost. (c) Fixed cost. (d) Variable cost.

Answer: (d) Question 2. Which one of the following cost curves is never ‘U’ shaped? (a) Average cost curve. (b) Marginal cost curve. (c) Average variable cost curve. (d) Average fixed cost curve.

Answer: (d) Question 3. Total cost in the short run is classified into fixed costs and variable costs. Which one of the following is a variable cost? (a) Cost of raw materials. (b) Cost of equipment. (c) Interest payment on past borrowings. (d) Payment of rent on building.

Answer: (a) Question 4. In the short run, when the output of a firm increases, its average fixed cost: (a) increases. (b) decreases. (c) remains constant. (d) first declines and then rises.

Answer: (b) Question 5. Which one of the following statements is correct? (a) When the marginal cost is rising, the average cost must also be rising. (b) When the average cost is rising, the marginal cost must be falling. (c) When the average cost is rising, the marginal cost is above the average cost. (d) When the average cost is falling, the marginal cost must be rising.

Answer: (c) Question 6. Which one of the following statements is an example of “explicit cost”? (a) The wages a proprietor could have made by working as an employee of a large firm. (b) The income that could have been earned in alternative uses by the resources owned by the firm. (c) The payment of wages by the firm. (d) The normal profit earned by a firm.

Answer: (c) Question 7. Which one of the following statements is an example of an “implicit cost”? (a) Interest that could have been earned on retained earnings used by the firm to finance expansion. (b) The payment of rent by the firm for the building in which it is housed. (c) The interest payment made by the firm for funds borrowed from a bank. (d) The payment of wages by the firm.

Answer: (a) Question 8. Marginal cost is defined as: (a) The change in total cost due to a one unit change in output. (b) Total cost divided by output. (c) The change in output due to a one unit change in an input. (d)Total product divided by the quantity of input.

Answer: (a) Question 9. Which one of the following statements is true to the relationship between marginal cost function and average cost function? (a) If MC is greater than ATC, ATC is falling. (b) ATC curve intersects MC curve at minimum MC. (c) MC curve intersects ATC curve at minimum ATC. (d) If MC is less than ATC, ATC is increasing.

Answer: (c) Question 10. Which one of the following statements is true to the relationship among the average cost functions? (a) ATC = AFC – AVC. (b) AVC = AFC + ATC. (c) AFC = ATC + AVC. (d) AFC = ATC – AVC.

Answer: (d) Question 11. Which one of the following elements is not a determinant of the firm’s cost function? (a) The production function. (b) The price of labour. (c) Taxes. (d) The price of the firm’s output.

Answer: (d) Question 12. Which one of the following statements is correct concerning the relationships among the firm’s cost functions? (a) ATC=AFC-AVC (b) AVC = AFC + ATC. (c) AFC = ATC + TVC. (d) AFC = ATC – AVC.

Answer: (c) Question 13. Suppose output increases in the short run, than the Total cost will: (a) increase due to an increase in fixed costs only. (b) increase due to an increase invariable costs only. (c) increase due to an increase in bothfixed and variable costs. (d) decrease if the firm is in the regionof diminishing returns.

Answer: (b) Question 14. A firm’s average fixed cost is Rs.20 at 6 units of output. What will it be at 4 units of output? (a) Rs.60 

(b) Rs.30 (c) Rs.40 

(d) Rs.20

Answer: (b) Question 15. If marginal cost equals to average total cost, (a) average total cost is falling (b) average total cost is rising (c) average total cost is maximized (d) average total cost is minimized

Answer: (d) Question 16. When marginal costs are below average total costs, (a) average fixed costs are rising (b) average total costs are falling (c) average total costs are rising (d) average total costs are minimized

Answer: (b) Question 17. If the average cost is falling, (a) marginal cost is rising (b) marginal cost is falling (c) marginal cost is equal to average cost (d) it is impossible to tell if marginal cost is rising or falling

Answer: (d) Question 18. The difference between average total cost and average variable cost: (a) is constant (b) is total fixed cost (c) gets narrow as output decreases (d) is the average fixed cost

Answer: (d) Question 19. If the total cost curve is parallel to X-axis, marginal cost will: (a) increase 

(b) decrease (c) zero 

(d) None of these.

Answer: (c) Question 20. The total cost at 5 units of output is Rs. 30. The fixed cost is Rs. 5. The average variable cost at 5 units of output is: [CBSE Sample Paper 2014] (a) Rs.25 

(b) Rs.6 (c) Rs.5 

(d) Rs.1

Answer: (c)

III. Short Answer Type Questions (3-4 Marks)

Question 1. Define total fixed cost (Supplement/ Indirect/overhead cost). Or Define fixed cost.[AI 2004, 06, 07; CBSE 2008C, 09] Or What is meant by fixed (supplementary) costs of a firm? Give examples. [AI 2007; CBSE 2004, 04C, 07C]

Answer: (i) Fixed costs are those costs of production which do not change with a change in output. (ii) These are the costs incurred on fixed factors, like rent of land and building, interest, etc. These are unavoidable contractual costs. (iii) Fixed costs are also called overhead costs or general costs because these are common for all the units produced. These costs are also called supplementary costs or indirect costs. (iv) The shape of Total fixed Cost is horizontal (Parallel to X-Axis). They have to be incurred when the output is large or small or even zero. Question 2. What is meant by variable (prime) cost of a firm? Give examples. [CBSE 2004 C; AI 2004]

Answer: (i) The cost incurred on variable factors of production is known as TVC. (ii) TVC is very much related with the production and fluctuates with the fluctuation in production. (iii) In case of zero level of production, TVC would also be zero. (iv) For example, Wages of casual labour, payment for raw material, etc. Question 3. Explain the behaviour of aver age fixed cost using numerical example. [CBSE 2013C]

Answer: (i) The per unit cost incurred on fixed factors of production is known as average fixed cost.

AFC falls as output increases because

 and TFC remains constant.So, as output increases, TFC remains constant, AFC falls. Question 4. Distinguish between variable cost and fixed cost. Give two examples of each.[AI 2004, 08; CBSE 99C, 2000C]

Answer: 

Question 5. Why is AC curve U-shaped in short run? Or Why is AC curve U-shaped?[AI 2006; CBSE 07C, 10Q]

Answer: Average Cost is U-Shaped because of Law of variable proportion: (i) The shape of average cost (AC) depends upon total cost (TC). (ii) Initially, total cost (TC) increases at a diminishing rate (Total Product increases at Increasing rate), which makes its average, i.e., average cost (AC) to fall, then reaches its minimum point.

(iii) Thereafter, total cost (TC) increases at increasing rate (Total Product increases at diminishing rate), which makes the average cost (AC) to rise. This type of production behaviour shows operation of law of variable proportion. Question 6. An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and explicit cost from this information. Explain. [CBSE 2012]

Answer: (i) For producing a commodity, a firm requires factor inputs (like services of land, labour, capital etc.) and non-factor inputs (like raw material, electricity, fuel etc.). (ii) Actual money spent by a firm on buying and hiring of factor and non¬factor inputs is called explicit cost. As per question, rent paid for the shop is an explicit cost. (iii) Implicit cost is the imputed or estimated value of inputs supplied by the owner of the firm himself. As, per question, imputed salary of the owner working as manager, imputed interest on self-supplied capital, etc. are implicit costs. cost and implicit cost. Question 7. State the distinction between explicit each.Give an example of each?

Answer:

Question 8. A producer starts a business by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. Explain. [AI 2012]

Answer: (i) For producing a commodity, a firm requires factor inputs (like services of land, labour, capital etc.) and non-factor inputs (like raw material, electricity, fuel efc.). (ii) Actual money spent by a firm on buying and hiring of factor and non¬factor inputs is called explicit cost. As per question, a producer is hiring the labour, than the wages and salary paid to labour is a explicit cost. (iii) Implicit cost is the imputed or estimated value of inputs supplied by the owner of the firm himself. As, per question, if a producers start a business by investing his own savings, than the imputed interest on self-supplied capital he earned is a implicit cost. Question 9. A farmer takes a farm on rent and carries on farming with the help of his family members. Identify explicit and implicit costs from this information. Explain. [AI 2012]

Answer: (i) For producing a commodity, a firm requires factor inputs (like services of land, labour, capital etc.) and non-factor inputs (like raw material, electricity, fuel etc.). (ii) Actual money spent by a firm on buying and hiring of factor and non¬factor inputs is called explicit cost. As per question, a farmer takes a farm on rent. So, the rent he pays to landloard is the explicit cost. (iii) Implicit cost is the imputed or estimated value of inputs supplied , by the owner of the firm himself. As per question, if a farmer carries on farming with the help of family members, even then the imputed wages will be an implicit cost. Question 10. Explain the relationship between AC and MC with the help of a diagram. [CBSE 2000C, 2001, 07, 07C, 09C; AI 2004, 08, 11]

Answer: (i) As long as MC is below AC, AC curve falls till their intersection at point E. (ii) When MC curve comes to fall, it falls more rapidly than AC curve and reaches its minimum point B earlier than the AC curve reaches its minimum point E. Therefore, MC curve is rising from B to E whereas AC curve is still falling from A to E. (iii) When MC curve is rising, it cuts the AC curve at its minimum point E and after that point MC is above than AC. Question 11. Define cost. State the relation between marginal cost and average variable cost. [CBSE 2015]

Answer: Cost is the sum total of explicit cost, implicit cost and certain minimum profit (normal profit). (i) As long as MC is below AVC, AVC curve falls till their intersection at point E. (ii) When MC curve comes to fall, it falls more rapidly than AVC curve and reaches its minimum point B earlier than the AVC curve reaches its minimum point E. Therefore, MC curve is rising from B to E whereas AVC curve is still falling from A to E. (iii) When MC curve is rising, it cuts the AVC curve at its minimum point E and after that point MC is above than AVC.

Question 12. What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more units of a good are produced? [A1 2015]

Answer: (a) The average fixed cost falls as more and more units of goods are produced. It is so because average fixed cost is equal to . Total Fixed Cost (TFC) Output and total fixed cost remains constant with increase in level of output. So, with constant total fixed cost and increasing output, the average fixed cost falls. (b) Average Variable Cost (AVC) is U-shaped with increase in output because of Law of Variable Proportion. (i) As we know the shape of AVC depends upon the shape of Total Variable Cost (TVC). Initially, TVC increases at diminishing rate (because Total Product Increases at increasing Rate), that makes the AVC to fall. (ii) Thereafter, TVC increases at increasing rate (because Total Product Increases at diminishing Rate), that makes the average variable cost to rise. (iii) So, from inverse S-shape, TVC curve, we derive the U shape AVC curve. Question 13. Can MC increase when AC falls?

Answer: Yes, it can happen when MC is below, than AC at the time of MC increases. The reason is that MC is confined to only one unit of the commodity produced whereas AC is related to all the units of commodity produced. As a result when MC increase, in case of MC, the whole increase is confined to the concerned one unit but in case of AC, this increase is shared by all the units of commodity produced. As the result of, rising MC is unable to bring about an increase in AC. Question 14. Find out the total fixed cost in the following:

Answer: The total fixed cost will be the same at all the levels of output, ranging from zero to six. For zero output, total cost is Rs 120. At zero output, total variable cost will be zero. Hence, Rs 120 represents total fixed cost at all levels of output. 

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[junker-town]

Can the Browns be more than offseason champs this time?

The Browns went from AFC North favorites in the 2019 offseason to a 6-10 record.

For the fourth straight year, the Cleveland Browns are having a smart offseason (that may amount to nothing).

The Browns spent the start of their offseason plugging some of their biggest holes.

After allowing Baker Mayfield to be sacked 40 times last season, Cleveland picked up one of the best tackles on the market by signing Titans standout Jack Conklin. Austin Hooper received the richest deal for a tight end, giving Mayfield another proven playmaker and another blocker in the run game.

Case Keenum joined the fold in case anything happens to the third-year quarterback. Keenum, who had a career year under the tutelage of Kevin Stefanski in 2017, reunites with his one-time Vikings QB coach. In January, Stefanski arrived to take the reins from an overmatched Freddie Kitchens as head coach.

The Browns have made a handful of moves that should inspire hope in a young roster. Now they have to try to avoid the fruitless fate that followed so many similar offseasons in Cleveland.

The Browns have made smart moves in the past, only to harvest nothing from them

In 2017, the Browns made enough offseason changes for me to open an analysis of their signings and draft picks with this line:

The Cleveland Browns will improve in 2017. After a 1-15 season, they have few other options.

Somehow, some way, I was wrong. Cleveland became the first team in NFL history to win one game and then get worse the following year. All this happened despite adding Myles Garrett, Larry Ogunjobi, David Njoku, and Kevin Zeitler. Without a franchise QB in tow and still under the leadership of Hue Jackson, the Browns went 0-16.

That led to more changes that seemed to be a step in the right direction. Mayfield and Tyrod Taylor arrived in 2018 to stabilize the passing offense. Jarvis Landry and Carlos Hyde followed. Four selections in the first 35 picks of that draft brought the promise of instant, low-cost starters like Nick Chubb and Denzel Ward.

But Jackson wasn’t fired until he struggled through a 2-5-1 start. While the Browns recovered over the latter half of the season, 2018 was another lost campaign — albeit one that ended with an overarching sense of confidence. Cleveland finished the year with a 5-3 record as Mayfield looked like a franchise quarterback. For the first time in recent memory, the Browns were favored to win the AFC North.

The team hired Kitchens, the interim offensive coordinator who made his QB a rookie of the year candidate, then traded for Odell Beckham Jr. to lead the receiving corps. Olivier Vernon came with him to provide an important counterpunch to Garrett’s pass rushing. Sheldon Richardson and Morgan Burnett were added to buttress a young, talented defense with veteran help. Expectations, again, were high.

The first-year coach was overwhelmed from Day 1. The Browns played sloppy — they gave away more than 1,100 yards in penalties — and Mayfield regressed. The defense failed to gel. Garrett missed the last six games due to a high-profile suspension. Kitchens followed up his preseason hype with six wins and was fired at the end of the year. Instead of winning the division, the Browns missed the playoffs for the 17th straight season.

So here we are, once again staring down a pretty good offseason haul and stoking the embers of the continuously smoldering landfill fire that is Cleveland optimism. The Browns have made fans pay time and time again for daring to dream, no matter how savvy their spring moves look. Will 2020 just be the latest link in a depressing chain?

Why 2020 could be different

Cleveland’s recent failures have been rooted in the team’s inability to cultivate a franchise QB. Hiring Stefanski gives the Browns an innovator who helped coach Keenum and Kirk Cousins to career-best performances in Minnesota. He’ll have an excellent opportunity to do the same with Mayfield.

Two key signings will also aid in what the Browns hope is Mayfield’s bounce-back year. After getting sacked entirely too often and getting only 41 receptions (and just a 59 percent catch rate) across five different tight ends, the third-year QB has reinforcements to rely on up front.

Conklin is the type of player who can provide above-average blocking at a vital spot. While his play has dipped after two stellar seasons to open his career, he can be a sigil of stability for a team in desperate need of leadership.

Hooper has never started more than 10 games in a season over a four-year career, but he’s coming off back-to-back Pro Bowl trips. In those two years, his per-16-game average pegged him around 80 catches, 800 yards, and six touchdowns. More importantly, he’s caught nearly 79 percent of his targets since 2018. He’s getting paid to be a trusted safety valve when defenses zero in on Landry and Beckham.

Conklin and Hooper are the headliners, but they aren’t the only new faces who could spur change.

Signing Karl Joseph is the latest fix for a hole at safety. Jabrill Peppers, who was supposed to be the guy, was traded to New York in the Beckham deal. Damarious Randall was solid after converting from corner to safety, but he missed a good chunk of last season due to a torn Achilles and is now a free agent. Even if Joseph hasn’t been especially consistent in his career, he fills a need for a middling pass defense.

Andrew Billings regressed last season in Cincinnati, but was an underrated piece in the center of the Bengals’ defensive line in 2018. Veteran defensive end Adrian Clayborn hasn’t stood out the past two seasons, though he can still bring a rotational edge-rushing presence. Former first-round pick Kevin Johnson was quietly solid as a rotational corner for the Bills in 2019 and may finally be hitting his stride at 27 years old. They’ll all help.

Then there’s the draft, where Cleveland will have four of the top 97 picks, including the 10th overall selection. This year’s class of prospects is heavy on big, athletic blockers and ballhawk defensive backs. It shouldn’t be difficult for the Browns to land a difference-maker at left tackle and safety come April.

Of course, expecting anything good for the Browns has proven to be folly. Even when the team makes good decisions, they seem to go nowhere.

But 2020 could be the year that changes. Stefanski’s arrival may mark the dawn of a new era. The Browns spent another offseason propping up Mayfield and making necessary improvements on both sides of the ball. Now they’ve got to churn that potential into production if they’re ever going to escape the endless cycle that’s kept them from sniffing the playoffs.

[ageloire]

Fixed Cost: What It Is & How to Calculate It

"Business is personal -- it's the most personal thing in the world."

These are famous words by Michael Scott from the TV show, The Office. And although this quote conflicts with the universal belief that business isn't personal, Michael's point of view is perfect when learning about a business's fixed costs -- or those costs that don't change as a company grows or shrinks.

To identify and calculate your business's fixed costs, let's start by looking at the ones you're already paying in your personal life. Then, we'll explain how a business manages its own fixed costs and review some common fixed cost examples.

What Is a Fixed Cost?

Fixed costs are those costs to a business that stay the same regardless of how the business is performing. These costs are known as fixed costs to distinguish them from variable costs, which do change as the company sells more or less of its product.

Fixed Cost Formula

Identify your building rent, website cost, and similar monthly bills.

Consider future repeat expenses you'll incur from equipment depreciation.

Isolate all of these fixed costs to the business.

Add up each of these costs for a total fixed cost (TFC).

Identify the number of product units created in one month.

Divide your TFC by the number of units created per month for an average fixed cost (AFC).

Consider your personal routine. As a single adult, your expenses would normally include a monthly rent or mortgage, utility bill, car payment, healthcare, commuting costs, and groceries. If you have children, this can increase variable costs like groceries, gas expenses, and healthcare.

While your variable costs increase after starting a family, your mortgage payment, utility bill, commuting costs, and car payment don't change for as long as you're in the same home and car. These expenses are your fixed costs because you pay the same amount no matter what changes you make to your personal routine.

In keeping with this concept, let's say a startup ecommerce business pays for warehouse space to manage its inventory, and 10 customer service employees to manage order inquiries. It suddenly signs a customer for a recurring order that requires another five paid customer service reps. While the startup's payroll expenses go up, the fixed cost of a warehouse stays the same.

Average Fixed Cost

Keep in mind you have to keep track of your business's fixed costs differently than you would your own. This is where average fixed cost comes into play.

Average fixed costs are the total fixed costs paid by a company, divided by the number of units of product the company is currently making. This tells you your fixed cost per unit, giving you a sense of how much the business is guaranteed to pay each time it produces a unit of your product -- before factoring in the variable costs to actually produce it.

Let's revisit the ecommerce startup example from earlier. Assume this business pays $5,000 per month for the warehouse space needed to manage its inventory, and leases two forklifts for $800 a month each. And last month, they developed 50 units of product.

The warehouse and forklift costs remain unchanged regardless of how many products they sell, giving them a total fixed cost (TFC) of $5,000 + ($800 x 2), or $6,600. By dividing its TFC by 50 -- the number of units the business produced last month -- the company can see its average fixed cost per unit of product. This would be $6,600 ÷ 50, or $132 per unit.

Fixed Cost Examples

So far, we've identified a handful of fixed cost examples since considering the costs we already pay as individuals. A home mortgage is to a lease on warehouse space, as a car payment is to a lease on a forklift.

But there are a number of fixed costs your business might incur that you rarely pay in your personal life. In fact, some variable costs to individuals are fixed costs to businesses. Here's a master list of fixed costs for any developing company to keep in mind:

Lease on office space: As long as your business operates in the same building, your rent cost doesn't change.

Utility bills: Your heating or cooling bill might fluctuate as seasons change, but it is generally not affected by business operations.

Website hosting costs: When you register your website domain, you pay a small monthly cost that remains static despite the business you perform on that website.

Ecommerce hosting platforms: Ecommerce platforms integrate with your website so you can conduct transactions with customers. They typically charge a low fixed cost per month.

Lease on warehouse space: Warehouses are paid for the same way you'd pay rent on your office space. They do not change in price as you store more or fewer products inside, but can have storage and capacity limits.

Manufacturing equipment: The equipment you need to produce your product is yours once you buy it, but it will depreciate over its useful lifetime. Depreciation can become a fixed cost if you know when you'll have to replace your equipment each year.

Lease on trucks for shipment: Truck leases work the same way as a car payment, and will not charge differently depending on how many shipments you make.

Small business loans: If you're financing a new business with a bank loan, your loan payments won't change with your business's performance. They are fixed for as long as you have a balance to pay on that loan.

Property tax: Your office space's building manager might charge you property tax, a fixed cost for as long as your business is on the property.

Health insurance: Health insurance costs might be a variable cost to an individual if they add or remove dependents from their policy, but to a business, the recurring costs to an insurer are fixed.

Calculating your fixed costs isn't always the most fun part of growing your business. But knowing what they are, and when you'll pay each one, gives you the peace of mind you need to serve and delight your customers.

from Marketing https://blog.hubspot.com/marketing/fixed-cost

[parvinasseaynk72insurance-blog]

Kia Sedona Cheap Insurance

Kia Sedona Cheap Insurance

Kia Sedona Cheap Insurance

BEST ANSWER: Try this site where you can compare free quotes :COVERAGE-FINDER.NET

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Kia Sedona Cheap Insurance

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[bradfordward-blog]

BA201 Week 5 “Costs and Firms in Perfectly Competitive Markets”

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https://homeworklance.com/downloads/ba201-week-5-costs-firms-perfectly-competitive-markets/

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  Total Cost

 Fill in the table. Assume TC stands for Total Cost, TFC as Total Fixed Cost, TVC as Total Variable Cost, ATC as Average Total Cost, AFC as Average Fixed Cost, AVC as Average Variable Cost, and MC as Marginal Cost. Then write a paragraph about which level of output would be considered the minimum LRATC.

Units of Output

TC

TFC

TVC

ATC

AFC

AVC

MC

020

1

1

2

3

3

4

4

12

5

75

6

16

7

24

8

86

9

360

  Grading Criteria Assignments

Maximum Points

Meets or exceeds  established assignment criteria

40

Demonstrates an  understanding of lesson concepts

20

Clearly presents  well-reasoned ideas and concepts

30

Uses proper  mechanics, punctuation, sentence structure, and spelling

[robertjaco-blog1]

BA201 Week 5 “Costs and Firms in Perfectly Competitive Markets”

Follow Below Link to Download File

https://homeworklance.com/downloads/ba201-week-5-costs-firms-perfectly-competitive-markets/

 We also Do 100% Original and Plagiarism Free Assignment / Homework and Essay

 Email us for original and Plagiarism Free Work At ( info.homeworklance@gmail.com ) or order us at

(https://homeworklance.com/custom-order/ )

  Total Cost

 Fill in the table. Assume TC stands for Total Cost, TFC as Total Fixed Cost, TVC as Total Variable Cost, ATC as Average Total Cost, AFC as Average Fixed Cost, AVC as Average Variable Cost, and MC as Marginal Cost. Then write a paragraph about which level of output would be considered the minimum LRATC.

Units of Output

TC

TFC

TVC

ATC

AFC

AVC

MC

020

1

1

2

3

3

4

4

12

5

75

6

16

7

24

8

86

9

360

  Grading Criteria Assignments

Maximum Points

Meets or exceeds  established assignment criteria

40

Demonstrates an  understanding of lesson concepts

20

Clearly presents  well-reasoned ideas and concepts

30

Uses proper  mechanics, punctuation, sentence structure, and spelling

[margdarsanme]

NCERT Class 12 Micro Economics Chapter 6 Cost

NCERT Class 12 Micro Economics Solutions 

Chapter 6 Cost 

NCERT TEXTBOOK QUESTIONS SOLVED : Question 1. Briefly explain the concept of the cost function.[1 Mark]

Answer: Cost function shows functional relationship between output and cost of production. It gives the least cost combination of inputs corresponding to different levels of output. Cost function is given as: C = f (X), ceteris paribus, where, C = Cost and X = Output Question 2. What are total fixed cost, total variable cost and total cost of a firm? How are they related? Or Draw TVC, TC, and TFC curves in a single diagram. [AI 2012][CBSE Sample Paper 2013][3 Marks]

Answer: (i) TC is divided into two parts TFC and TVC such that TC = TFC + TVC. (ii) TFC is the overhead cost and it remains constant or fixed whatever be the level of output. TFC curve is a horizontal line parallel to the x-axis. (iii) TVC is cost due to increased use of variable factors like raw material, labour, etc. TVC is inverse S-shaped starting from the origin due to law of variable proportion. (iv) TC is aggregate of TFC and TVC. TC curve is inverse S-shaped starting from the level of fixed cost. The reason behind it shape is the law of variable proportion.

Question 3. What are the average fixed cost, average variable cost and average cost of a firm? How are they related?[3-4 Marks]

Answer: AFC: The per unit cost incurred on fixed factors of production is known as average fixed cost.

AFC always decreases as the firm increases the level of production. AVC: It is variable cost per unit of output produced.

 It is obtained by dividing the total variable cost by the quantity of output. AVC initially decreases. But after reaching the stage of minimum cost it starts increasing. AVC is U-Shaped. AC: It is cost per unit of output produced. It can be obtained by dividing the total cost by the quantity of output produced. Relationship between AFC, AVC and AC. There is a unique relationship among AC, AFC and AVC. AC is the sum of AFC and AVC, i.e., AC = AFC + AVC. Question 4. Can there be some fixed cost in the long run? If not, why? [1 Mark]

Answer: No, there are no fixed costs in the long run as all the factors become variable. Fixed cost exists only in short run. Question 5. What does the average fixed cost curve look like? Why does it look so?[3 Marks] Or How does AFC behave as output is increased? [CBSE 2009C] Or What is the behaviour of average fixed cost as output increases? [CBSE 2012]

Answer: The shape of AFC is downward sloping Rectangular hyperbola. AFC falls as output increases because

  and TFC remains Output constant. 

So, as output increases, TFC remains constant, but AFC falls. Question 6. What do the short run marginal cost, average variable cost and short run average cost curves look like?[1 Mark]

Answer: The Short run marginal cost, average variable cost and short run average cost curves are U-shaped because of Law of variable proportion. Question 7. Why does SMC curve cut AVC curve at the minimum point of AVC curve?[3 Marks]

Answer: (i) It happens because when AVC falls, SMC is less than AVC. (ii) When AVC starts rising, SMC is more than AVC. (iii) So, it is only when AVC is constant and at its minimum point, that SMC is equal to AVC. Therefore, SMC curve cuts AVC curve at its minimum point. Question 8. At which point does the SMC curve cut the SAC curve? Give reason in support of your answer.[3 Marks]

Answer: (i) It happens because when SAC falls, SMC is less than SAC. (ii) When SAC starts rising, SMC is more than SAC. (iii) So, it is only when SAC is constant and at its minimum point, that SMC is equal to SAC. Therefore, SMC curve cuts SAC curve at its minimum point. Question 9. Why is the short run marginal cost curve U- Shaped? [3 Marks]

Answer: Marginal cost is U-shaped because of Law of variable proportion:

(i) As we know the shape of MC depends on the shape of TVC or TC. Let us suppose TVC. (ii) Initially, TVC increases at a diminishing rate (Total Product increases at Increasing rate), which makes the gap of TVC, i.e. MC to fall. (iii) Thereafter, TVC increases at an increasing rate( Total Product increases at diminishing rate) which makes the marginal cost to rise. (iv) So, from inverse S-shape TVC curve, we derive U-shape MC curve. Question 10. What do the long run marginal cost and average cost curves look like?

Answer: Out Of Syllabus. Question 11. The following table shows the total cost schedule of a firm. What is the total fixed cost schedule of this firm? Calculate the TVC, AFC, AVC, SAC and SMC schedules of the firm.[6 Marks]

Answer: The total fixed cost will be the same at all the levels of output ranging from zero to six. For zero output, total cost is ? 10. At zero output, total variable cost will be zero. Hence, Rs. 10 represents total fixed cost at all levels of output.

Question 12. The following table gives the total cost schedule of a firm. It Is also given that the average fixed cost at 4 units of output is Rs. 5.

Find the TVC, TFC. AVC, AFC, SAC and SMC schedules of the firm for the corresponding values of output.[6 Marks]

Answer:

Question 13. A firm’s SMC schedule is shown in the following table. The total fixed cost of the firm is Rs. 100.

Find the TVC, TC, AVC and SAC schedules of the firm.[6 Marks] Answer:  

MORE QUESTIONS SOLVED

I. Very Short Answer Type Questions (1 Mark) Question 1. Give the meaning of cost.Or [CBSE 2007] What is meant by cost in economics? [CBSE, Sample Paper 2010} Or What does ‘cost’ mean in economics? [CBSE 2008]

Answer: Cost of producing a good, in economics, is the sum total of explicit cost, implicit cost and certain minimum profit (normal profit). Question 2. Give two examples of fixed cost.[ CBSE 2013]

Answer: (i) Rent of the building. (ii) Salary of permanent employees. Question 3. Give two examples of variable costs.

Answer: (i) Raw materials. (ii) Labour engaged on production. Question 4. Why is average total cost greater than average variable cost?

Answer: Because AC is sum total of AFC and AVC. Question 5. What is meant by total cost?

Answer: During production the expenditure incurred on various factors of production is known as total cost. Question 6. Why are TC and TVC curves parallel to each other?

Answer: TC and TVC curves are parallel to each other because the vertical gap between them represents TFC which remains constant at all levels of output. Question 7. How does the total fixed cost change when output changes? [CBSE 2003]

Answer: Total fixed cost does not change with the change in output. Question 8. Give the meaning of marginal cost. [CBSE, Sample Paper 2010]

Answer: The cost incurred on additional unit of output is known as Marginal cost. Question 9. How is MC related to TFC?

Answer: MC is independent (not related) of TFC and is affected by change in only TVC. Question 10. How is TVC derived from MC schedule?

Answer: TVC = SMC Question 11. What does the area under marginal cost curve show?

Answer: Area under marginal cost curve shows total variable cost. Question 12. Can AC be less than MC when AC is rising?

Answer: Yes, AC can be less than MC, when AC is rising, as long as MC is more than AC. Question 13. When AC curve slopes downwards, what will be the position of MC curve?

Answer: MC curve is below AC curve. Question 14. What happens to AC when MC is equal to AC?

Answer: AC is constant and at its minimum point. Question 15. Can AC and AVC curves touch each other?

Answer: No, because difference between AC and AVC is AFC and AFC can never be zero. Question 16. Give two examples of explicit cost.

Answer: The two examples are: 

(i) Wages to worker by a firm, and 

(ii) rent to landlord by a firm. Question 17. Give two examples of implicit cost of a firm.

Answer: The two examples are: (i) imputed cost of the seller’s self-owned shop; and (ii) imputed cost of family labour being used free by the seller. Question 18. What is the behaviour of Total Variable Cost, as output increases? [AI 2012]

Answer: TVC first increases at a diminishing rate and then increases at an increasing rate. Question 19. If it is given that the total variable cost for producing 15 units of output is Rs. 3000 and for 16 units is Rs. 3,500. Find the value of Marginal Cost. [CBSE, Sample Paper 2016]

Answer: MCn = TVCn-TVCn-1 MC16 =TVC16 – TVC15 =3500 – 3000 =500

II. Multiple Choice Questions (1 Mark)

Question 1. Which cost increases continuously with the increase in production? (a) Average cost, (b) Marginal cost. (c) Fixed cost. (d) Variable cost.

Answer: (d) Question 2. Which one of the following cost curves is never ‘U’ shaped? (a) Average cost curve. (b) Marginal cost curve. (c) Average variable cost curve. (d) Average fixed cost curve.

Answer: (d) Question 3. Total cost in the short run is classified into fixed costs and variable costs. Which one of the following is a variable cost? (a) Cost of raw materials. (b) Cost of equipment. (c) Interest payment on past borrowings. (d) Payment of rent on building.

Answer: (a) Question 4. In the short run, when the output of a firm increases, its average fixed cost: (a) increases. (b) decreases. (c) remains constant. (d) first declines and then rises.

Answer: (b) Question 5. Which one of the following statements is correct? (a) When the marginal cost is rising, the average cost must also be rising. (b) When the average cost is rising, the marginal cost must be falling. (c) When the average cost is rising, the marginal cost is above the average cost. (d) When the average cost is falling, the marginal cost must be rising.

Answer: (c) Question 6. Which one of the following statements is an example of “explicit cost”? (a) The wages a proprietor could have made by working as an employee of a large firm. (b) The income that could have been earned in alternative uses by the resources owned by the firm. (c) The payment of wages by the firm. (d) The normal profit earned by a firm.

Answer: (c) Question 7. Which one of the following statements is an example of an “implicit cost”? (a) Interest that could have been earned on retained earnings used by the firm to finance expansion. (b) The payment of rent by the firm for the building in which it is housed. (c) The interest payment made by the firm for funds borrowed from a bank. (d) The payment of wages by the firm.

Answer: (a) Question 8. Marginal cost is defined as: (a) The change in total cost due to a one unit change in output. (b) Total cost divided by output. (c) The change in output due to a one unit change in an input. (d)Total product divided by the quantity of input.

Answer: (a) Question 9. Which one of the following statements is true to the relationship between marginal cost function and average cost function? (a) If MC is greater than ATC, ATC is falling. (b) ATC curve intersects MC curve at minimum MC. (c) MC curve intersects ATC curve at minimum ATC. (d) If MC is less than ATC, ATC is increasing.

Answer: (c) Question 10. Which one of the following statements is true to the relationship among the average cost functions? (a) ATC = AFC – AVC. (b) AVC = AFC + ATC. (c) AFC = ATC + AVC. (d) AFC = ATC – AVC.

Answer: (d) Question 11. Which one of the following elements is not a determinant of the firm’s cost function? (a) The production function. (b) The price of labour. (c) Taxes. (d) The price of the firm’s output.

Answer: (d) Question 12. Which one of the following statements is correct concerning the relationships among the firm’s cost functions? (a) ATC=AFC-AVC (b) AVC = AFC + ATC. (c) AFC = ATC + TVC. (d) AFC = ATC – AVC.

Answer: (c) Question 13. Suppose output increases in the short run, than the Total cost will: (a) increase due to an increase in fixed costs only. (b) increase due to an increase invariable costs only. (c) increase due to an increase in bothfixed and variable costs. (d) decrease if the firm is in the regionof diminishing returns.

Answer: (b) Question 14. A firm’s average fixed cost is Rs.20 at 6 units of output. What will it be at 4 units of output? (a) Rs.60 

(b) Rs.30 (c) Rs.40 

(d) Rs.20

Answer: (b) Question 15. If marginal cost equals to average total cost, (a) average total cost is falling (b) average total cost is rising (c) average total cost is maximized (d) average total cost is minimized

Answer: (d) Question 16. When marginal costs are below average total costs, (a) average fixed costs are rising (b) average total costs are falling (c) average total costs are rising (d) average total costs are minimized

Answer: (b) Question 17. If the average cost is falling, (a) marginal cost is rising (b) marginal cost is falling (c) marginal cost is equal to average cost (d) it is impossible to tell if marginal cost is rising or falling

Answer: (d) Question 18. The difference between average total cost and average variable cost: (a) is constant (b) is total fixed cost (c) gets narrow as output decreases (d) is the average fixed cost

Answer: (d) Question 19. If the total cost curve is parallel to X-axis, marginal cost will: (a) increase 

(b) decrease (c) zero 

(d) None of these.

Answer: (c) Question 20. The total cost at 5 units of output is Rs. 30. The fixed cost is Rs. 5. The average variable cost at 5 units of output is: [CBSE Sample Paper 2014] (a) Rs.25 

(b) Rs.6 (c) Rs.5 

(d) Rs.1

Answer: (c)

III. Short Answer Type Questions (3-4 Marks)

Question 1. Define total fixed cost (Supplement/ Indirect/overhead cost). Or Define fixed cost.[AI 2004, 06, 07; CBSE 2008C, 09] Or What is meant by fixed (supplementary) costs of a firm? Give examples. [AI 2007; CBSE 2004, 04C, 07C]

Answer: (i) Fixed costs are those costs of production which do not change with a change in output. (ii) These are the costs incurred on fixed factors, like rent of land and building, interest, etc. These are unavoidable contractual costs. (iii) Fixed costs are also called overhead costs or general costs because these are common for all the units produced. These costs are also called supplementary costs or indirect costs. (iv) The shape of Total fixed Cost is horizontal (Parallel to X-Axis). They have to be incurred when the output is large or small or even zero. Question 2. What is meant by variable (prime) cost of a firm? Give examples. [CBSE 2004 C; AI 2004]

Answer: (i) The cost incurred on variable factors of production is known as TVC. (ii) TVC is very much related with the production and fluctuates with the fluctuation in production. (iii) In case of zero level of production, TVC would also be zero. (iv) For example, Wages of casual labour, payment for raw material, etc. Question 3. Explain the behaviour of aver age fixed cost using numerical example. [CBSE 2013C]

Answer: (i) The per unit cost incurred on fixed factors of production is known as average fixed cost.

AFC falls as output increases because

 and TFC remains constant.So, as output increases, TFC remains constant, AFC falls. Question 4. Distinguish between variable cost and fixed cost. Give two examples of each.[AI 2004, 08; CBSE 99C, 2000C]

Answer: 

Question 5. Why is AC curve U-shaped in short run? Or Why is AC curve U-shaped?[AI 2006; CBSE 07C, 10Q]

Answer: Average Cost is U-Shaped because of Law of variable proportion: (i) The shape of average cost (AC) depends upon total cost (TC). (ii) Initially, total cost (TC) increases at a diminishing rate (Total Product increases at Increasing rate), which makes its average, i.e., average cost (AC) to fall, then reaches its minimum point.

(iii) Thereafter, total cost (TC) increases at increasing rate (Total Product increases at diminishing rate), which makes the average cost (AC) to rise. This type of production behaviour shows operation of law of variable proportion. Question 6. An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and explicit cost from this information. Explain. [CBSE 2012]

Answer: (i) For producing a commodity, a firm requires factor inputs (like services of land, labour, capital etc.) and non-factor inputs (like raw material, electricity, fuel etc.). (ii) Actual money spent by a firm on buying and hiring of factor and non¬factor inputs is called explicit cost. As per question, rent paid for the shop is an explicit cost. (iii) Implicit cost is the imputed or estimated value of inputs supplied by the owner of the firm himself. As, per question, imputed salary of the owner working as manager, imputed interest on self-supplied capital, etc. are implicit costs. cost and implicit cost. Question 7. State the distinction between explicit each.Give an example of each?

Answer:

Question 8. A producer starts a business by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. Explain. [AI 2012]

Answer: (i) For producing a commodity, a firm requires factor inputs (like services of land, labour, capital etc.) and non-factor inputs (like raw material, electricity, fuel efc.). (ii) Actual money spent by a firm on buying and hiring of factor and non¬factor inputs is called explicit cost. As per question, a producer is hiring the labour, than the wages and salary paid to labour is a explicit cost. (iii) Implicit cost is the imputed or estimated value of inputs supplied by the owner of the firm himself. As, per question, if a producers start a business by investing his own savings, than the imputed interest on self-supplied capital he earned is a implicit cost. Question 9. A farmer takes a farm on rent and carries on farming with the help of his family members. Identify explicit and implicit costs from this information. Explain. [AI 2012]

Answer: (i) For producing a commodity, a firm requires factor inputs (like services of land, labour, capital etc.) and non-factor inputs (like raw material, electricity, fuel etc.). (ii) Actual money spent by a firm on buying and hiring of factor and non¬factor inputs is called explicit cost. As per question, a farmer takes a farm on rent. So, the rent he pays to landloard is the explicit cost. (iii) Implicit cost is the imputed or estimated value of inputs supplied , by the owner of the firm himself. As per question, if a farmer carries on farming with the help of family members, even then the imputed wages will be an implicit cost. Question 10. Explain the relationship between AC and MC with the help of a diagram. [CBSE 2000C, 2001, 07, 07C, 09C; AI 2004, 08, 11]

Answer: (i) As long as MC is below AC, AC curve falls till their intersection at point E. (ii) When MC curve comes to fall, it falls more rapidly than AC curve and reaches its minimum point B earlier than the AC curve reaches its minimum point E. Therefore, MC curve is rising from B to E whereas AC curve is still falling from A to E. (iii) When MC curve is rising, it cuts the AC curve at its minimum point E and after that point MC is above than AC. Question 11. Define cost. State the relation between marginal cost and average variable cost. [CBSE 2015]

Answer: Cost is the sum total of explicit cost, implicit cost and certain minimum profit (normal profit). (i) As long as MC is below AVC, AVC curve falls till their intersection at point E. (ii) When MC curve comes to fall, it falls more rapidly than AVC curve and reaches its minimum point B earlier than the AVC curve reaches its minimum point E. Therefore, MC curve is rising from B to E whereas AVC curve is still falling from A to E. (iii) When MC curve is rising, it cuts the AVC curve at its minimum point E and after that point MC is above than AVC.

Question 12. What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more units of a good are produced? [A1 2015]

Answer: (a) The average fixed cost falls as more and more units of goods are produced. It is so because average fixed cost is equal to . Total Fixed Cost (TFC) Output and total fixed cost remains constant with increase in level of output. So, with constant total fixed cost and increasing output, the average fixed cost falls. (b) Average Variable Cost (AVC) is U-shaped with increase in output because of Law of Variable Proportion. (i) As we know the shape of AVC depends upon the shape of Total Variable Cost (TVC). Initially, TVC increases at diminishing rate (because Total Product Increases at increasing Rate), that makes the AVC to fall. (ii) Thereafter, TVC increases at increasing rate (because Total Product Increases at diminishing Rate), that makes the average variable cost to rise. (iii) So, from inverse S-shape, TVC curve, we derive the U shape AVC curve. Question 13. Can MC increase when AC falls?

Answer: Yes, it can happen when MC is below, than AC at the time of MC increases. The reason is that MC is confined to only one unit of the commodity produced whereas AC is related to all the units of commodity produced. As a result when MC increase, in case of MC, the whole increase is confined to the concerned one unit but in case of AC, this increase is shared by all the units of commodity produced. As the result of, rising MC is unable to bring about an increase in AC. Question 14. Find out the total fixed cost in the following:

Answer: The total fixed cost will be the same at all the levels of output, ranging from zero to six. For zero output, total cost is Rs 120. At zero output, total variable cost will be zero. Hence, Rs 120 represents total fixed cost at all levels of output. 

from Blogger http://www.margdarsan.com/2020/08/ncert-class-12-micro-economics-chapter_41.html

[junker-town]

The 4 NFL teams with the most to panic about in Week 13

Derek Carr doesn’t have a a win when the temperature drops below 40.

The stakes are getting higher as the playoffs approach. This week, the 49ers are tasked with trying to stop Lamar Jackson, while the Cowboys’ anti-analytics stance is costing them.

Things are starting to get real in the NFL. For the first time all season, teams can start clinching playoff berths. This week, it’s the Patriots, 49ers, and Saints. If they don’t lock down a spot this week, then it’s likely they will soon.

Other teams don’t have that kind of margin for error. A loss in any of the next four weeks could be the difference between making the postseason and getting an early vacation.

Even the best teams have something to worry about, though. The Patriots are 10-1, but they still haven’t figured out how to solve their offensive woes. The Texans, who are in the driver’s seat in the AFC South, have to play the Patriots — a team they’ve beaten just once in franchise history. The Saints needed a last-minute miracle to avoid another upset home loss to a lesser NFC South rival.

The Packers just got whupped by the 49ers. The 49ers have to face Lamar Jackson this week, and in turn, Jackson has to face that ferocious 49ers pass rush that just made Aaron Rodgers look like Mitchell Trubisky.

So yeah, there’s a lot of panic to go around the league. Here’s who we’re focusing on this week:

Derek Carr can’t handle cold weather (and December is coming)

The Raiders put their rebuild ahead of schedule with a surprising 6-4 start that had Jon Gruden staring at a playoff berth in just his second year in Oakland. And then, facing off against a Jets team that was 1-6 against opponents with more than two wins this season, that momentum collapsed in on itself like a dying star.

New York staged a three-ring circus atop the Raiders’ playoff aspirations in Week 12, notching its biggest blowout of the year in a 34-3 pantsing that saw Gruden effectively surrender late in the third quarter and leave the last 19 minutes of the game in the hands of sentient scarecrow Mike Glennon. That knocked Oakland off its perch as a playoff team and stuck it in the middle of a four-way tie for the AFC’s sixth and final postseason berth.

Getting back to the top of that heap won’t be easy. The Raiders’ remaining schedule features two teams with winning records (the Chiefs and Titans), and two more erstwhile contenders (the Jaguars and Chargers) who’ll be tough to dispatch. Just as importantly, two of Oakland’s final five games will take place in cold weather scenarios similar to the one it dealt with in north New Jersey in Week 12 — an environment where starting quarterback Derek Carr typically struggles.

So @coachdelrio knows what he speaks of. Said Derek Carr does't like cold weather games. In games where temp is under 40 at kickoff.. here are his numbers: 0-4 152 Pass YPG 51% Comp pct TD-Int (3-4) 9 Total QBR Temps at Arrowhead will be in the 30's Sunday

— trey wingo (@wingoz) November 26, 2019

He’s going to have to shake off that ignominious history to both upset the Chiefs and return to the playoffs. He’s also got plenty to prove before anyone takes the Raiders’ AFC West title hopes seriously. Oakland only has one win this season over a team with a winning record (the Colts) and ranks outside the top 20 in both points scored and points allowed this fall. The franchise hasn’t won a playoff game since the 2002 postseason, and those numbers — and the loss to the Jets — suggest that drought won’t end in 2020.

Panic index: Oakland has restored Carr’s value as a reliable starter quarterback (weather be damned), revitalized 2018’s league-worst pass rush, and has already matched its preseason over/under line for wins. Gruden’s second season will be viewed as a step forward even if Sunday’s loss to the Jets was the beginning of a collapse.

Lamar Jackson is going to be insanely tough for the 49ers to contain

The 49ers are rolling right along, handling almost everything thrown at them this season. Their lone loss came in a near-tie against the Seahawks. Defensive coordinator Robert Saleh is getting a lot of attention, as he should, for coaching up a relatively young defense into being one of the most feared units in the NFL.

The 49ers should also feel good about besting Aaron Rodgers and the Packers, the first game in their historically difficult three-week stretch. Unfortunately for San Francisco, next up is a challenge that no defense wants to be tasked with right now: figure out a way to stop Lamar Jackson.

Even when the Ravens lost two games this season — falling to the Chiefs and Browns in September — it didn’t feel like the opposing defense had “solved” Jackson by any means. The best way to beat these Ravens is to meet them on an off day, and that’s not something you can plan for.

The games most relevant to the 49ers’ Week 13 matchup are their two wins over Kyler Murray and the Cardinals. The Cardinals also have a quarterback who can run, but they have a lot less talent around Murray, who isn’t on Jackson’s level yet, either.

Still, Murray played pretty well against the 49ers. In those two games, the rookie threw for 391 yards and four touchdowns while rushing for 101 yards and another touchdown. He had the 49ers on the ropes, with the 3-7-1 Cardinals coming up just short both times.

For a glimpse of Jackson-like plays that can beat the 49ers:

Seeing stars @K1 puts us back in the lead! pic.twitter.com/ifYHifGs9z

— Arizona Cardinals ⋈ (@AZCardinals) November 17, 2019

Panic index: There will probably never be a moment where something “clicks” and we all suddenly know to beat Lamar Jackson. Eventually, teams will adapt to some degree, but for now, he’s an unstoppable whirlwind of big plays. He takes great defensive players and makes them look like absolute trash. Most recently, Aaron Donald and the Rams’ stout defensive front stood no chance of containing him on Monday Night Football this past week.

The 49ers are sitting at 10 wins, and don’t have too much to panic about overall, especially on defense. However, Jackson’s abilities are entirely aligned to beat aggressive defenses, and the 49ers may be the most aggressive in the league.

While the 49ers are giving up the second-fewest rushing yards in the league, they’re also middle of the pack when it comes to yard per carry allowed (4.7). The Cardinals’ average rushing offense was able to take advantage of it. That means the Ravens’ top-ranked (in every category) rushing offense definitely can.

Jared Goff went the entire month without throwing a TD pass

It has been a difficult last few weeks for the Los Angeles Rams’ fourth-year quarterback. In the last three games, he’s thrown zero touchdowns and five interceptions. He’s the only starting quarterback in the league to not score any touchdowns this month, and he ranks near the bottom of the NFL in completion percentage, interceptions, passer rating, and yards per attempt in November:

It's been a particularly rough November (Weeks 10-12) for Goff. With a minimum of 15 pass attempts in that span (33 qualifying QB's), he ranks: * Comp% - 61.46% (19th) * INT - 5 (30th) * Rating - 58.9 (29th) * AY/A - 4.20 (29th) He's the only QB with 0 touchdowns.

— Bate™ (@NoPlanB_) November 26, 2019

Take a look at Goff’s numbers month-to-month this season — November was easily his worst.

September (3-1 record): 64.2 completion percentage, 1,254 yards, 6 TD, 6 INT, 82.9 passer rating, 7.3 yards per attempt, 4 fumbles (3 lost)

October (2-2 record): 57.5 completion percentage, 1,113 yards, 5 TD, 1 INT, 91.7 passer rating, 7.9 yards per attempt, 2 fumbles (1 lost)

November (1-2 record): 61.5 completion percentage, 628 yards, 0 TD 5 INT, 58.9 passer rating, 6.5 yards per attempt, 4 fumbles (1 lost)

The Rams are 1-2 in the last three games while Goff has struggled most and are just coming off their worst loss yet: a 45-6 beating from the Ravens. The Rams are now 6-5 and play in the toughest division in the loaded NFC. With upcoming games against the Seahawks, Cowboys, and 49ers, the playoffs look like a long shot at this point. But even more worrisome is what’s happening to their franchise quarterback.

Panic index: It’s been three years since the Rams drafted Goff at No. 1 overall, and he’s improved each season — until now. While the QB did lead Los Angeles to a Super Bowl just last year, his regression this season is still concerning, even if not all Goff’s fault (cough, his OL, cough).

That said, Sean McVay did wonders when he took over as head coach of the Rams. Goff threw just 5.3 yards per attempt and had five touchdowns to seven interceptions as a rookie under Jeff Fisher. Goff’s numbers skyrocketed the next two years under McVay. It’s possible that Goff’s problems won’t get fixed in December, but that doesn’t mean he’s permanently broken either. There’s still time to get him back on track, whether it’s this year or next.

The Cowboys refuse to use analytics

There’s nothing wrong with leaning on your football instincts as an NFL head coach. Even if the odds are stacked against you, sometimes it’s good to channel Han Solo and tell your assistant coach equivalent of C-3PO to pipe down with his talk of the odds.

Still, it doesn’t hurt to have all the information at your disposal when trying to make a decision. The Cowboys would rather fly blind.

During his weekly radio show appearance on 105.3 The Fan, head coach Jason Garrett said he doesn’t use in-game win probability stats to help him make decisions. That’s wild, considering Garrett is the NFL coach who most resembles a robot.

01101001 01110100 00100111 01110011 00100000 01100011 01101111 01101100 01100100 00101100 00100000 01100110 01100001 01101101 pic.twitter.com/J1QFE1MVup

— SB Nation (@SBNation) November 24, 2019

A day later, Cowboys owner Jerry Jones said he was fine with Garrett sticking his fingers in his ears.

“You’re dealing with averages, you’re dealing with almost theory,” Jones said. “And you’re certainly dealing with a result but it doesn’t take into account really the kinds of times when you’ve gone against every odds and made it work. I’ve had my biggest success when I’m sure analytics would have said make the other decision the other way.”

That’s fine, but the Cowboys may have had a better chance to win in Week 12 if Garrett had some analytics on his side. With just over six minutes left in the game, the Patriots had a 13-6 lead over the Cowboys, but Garrett opted for a 29-yard field goal instead of trying to convert a fourth-and-7 situation inside the red zone.

Would Garrett have made the same decision if he knew the field goal actually dropped the Cowboys probability of winning, even though it was successful? You’d certainly hope so.

Panic index: The Ravens have embraced analytics as much as any team in the NFL, and it’s working out really well for them. Statistics favor aggressiveness and no team has converted more fourth downs than Baltimore in 2019. Meanwhile, the Cowboys have been successful on just one fourth down all year and have lost four games by four points or fewer.

Garrett’s been the subject of plenty of criticism in recent years and his refusal to join the 21st century is another reason Dallas hasn’t been able to turn its ample talent into a trip to the Super Bowl.

[yahoo-shutdown-corner-blog]

2018 NFL Preview: With or without Andrew Luck, the Colts have a lot of work to do

Yahoo Sports is previewing all 32 teams as we get ready for the NFL season, counting down the teams one per weekday in reverse order of our initial 2018 power rankings. No. 1 will be revealed on Aug. 1, the day before the Hall of Fame Game kicks off the preseason.

(Yahoo Sports graphics by Amber Matsumoto)

Two Colts previews can be written: One with Andrew Luck, and one without. Neither is particularly rosy, but at least the first one would have some promise attached.

There’s no reliable prediction anymore about Luck. The Colts probably don’t know. When “Andrew Luck finally throws a football” is legitimate news in mid-June, you know how weird the whole ordeal became. Maybe Luck looks as good as ever this season, maybe he’s a shell of himself, maybe he has a setback and doesn’t play at all. We’ll have to wait and see. There have been too many optimistic predictions from the Colts to rely on those anymore. Anyone who says they know what to expect from Luck is lying.

The Colts’ biggest issue is Luck, but a healthy return wouldn’t fix everything. The defense allowed Brock Osweiler to have one of the best games by any quarterback in 2017. The offensive skill-position group is T.Y. Hilton and not much else. The Colts averaged 4.6 yards per play (tied for last in NFL) and allowed 5.7 yards per play (tied for second-to-last in NFL), a staggering minus-1.1 yards per play differential. To put that in perspective, the 0-16 Cleveland Browns were minus-0.2.

While Josh McDaniels deserves to get ripped for how he left the Colts hanging, and his reasons for staying in New England still seem dubious, you can understand the conspiracy theory that he realized how bad the Colts look on paper and got cold feet. And the Colts’ immediate future is even worse if Luck doesn’t come back to form.

[Yahoo Fantasy Football leagues are open: Sign up now for free]

This will take new coach Frank Reich and general manager Chris Ballard a while. They know that. The roster is really young. The Colts didn’t do much in free agency, signing some low-cost veterans to fill some gaps. They had 11 draft picks (six in the top 104, including fantastic guard Quenton Nelson at No. 6), and a large number of them might have to play immediately. There was no reason for the Colts to continue the charade that Luck’s return would restore them to a playoff team. This is a rebuild, and they’re going to be prudent about it.

The Reich hire at least went as well as could be expected, given that messy situation. The move was received well after the McDaniels fiasco. While that might be wishful thinking, it’s not a bad idea to test that Doug Pederson tree. If Reich can bring some of the more innovative and aggressive ways of the Eagles’ offense to Indianapolis it could be a huge help to Luck if he … well, you know.

There has been such drastic turnover of the roster since Ballard took over in January of 2017 that most of the Colts haven’t even played with Andrew Luck. He should be the one thing the Colts can depend on, but we all know by now that’s not the case.

Indianapolis Colts quarterback Andrew Luck didn’t play all last season due to shoulder surgery. (AP)

Given where the Colts are as a franchise, I had no problem with their offseason. They gave out only two multi-year deals in free agency: Defensive end Denico Autry (three years, $17.8 million) and tight end Eric Ebron (two years, $13 million). They didn’t overpay to keep players like receiver Donte Moncrief or cornerback Rashaan Melvin. The draft was solid, starting with guard Quenton Nelson (I’m a big fan of second-round linebacker Darius Leonard, too). If the Colts hit a home run with high-upside late-round receivers Deon Cain or Daurice Fountain that would be a tremendous help. This is what a rebuilding team’s offseason should look like.

GRADE: B

We all know what Andrew Luck can do when he’s right. The Colts are 43-27 with him under center. And the 2017 Colts were a little more competitive than their record showed. As NFL analyst Warren Sharp pointed out, the Colts trailed at the half in only six games. They went 2-7 in games they led at halftime. Sharp said the Colts are the only team in the past 27 years to lose at least seven games in which they led at halftime. Also, they led through the third quarter nine times. Sharp wrote the Colts were the only team to lose more than two games after leading through three quarters … and the Colts lost five of those games. Only six NFL teams lost more than once after entering the fourth quarter with the lead, according to Sharp. There are reasons the Colts couldn’t finish games, like a horrible secondary and an offense that lacked pop, but records in close games usually even out to about .500 over time. You’d figure Luck could help in that area.

You can fix only so many problems in one draft, but the Colts ignored a glaring need at cornerback. The Colts’ starting cornerback situation might be the worst in the NFL. Pierre Desir has rarely been healthy in his four seasons with three teams (13 career starts), and 2017 second-round pick Quincy Wilson showed little as a rookie. They’ll probably be the starters. Even in a division that doesn’t have the best passing offenses, the Colts might give up a ton of yards.

If Andrew Luck misses more time, at least the Colts have Jacoby Brissett. They stole him in a trade right before the season with the Patriots (it wasn’t even the lightest trade New England made with a backup quarterback last year) and he fared relatively well under difficult circumstances. Despite not joining the team until Sept. 2, Brissett started 15 games behind a terrible offensive line, without much help from the running game and an average-at-best receiving corps. He still posted an 81.7 rating and had some intriguing stretches. A lot of teams have backups worse than Brissett. The Colts just hope Brissett is their backup, and not starting again.

The Colts need to find difference makers on defense. Safety Malik Hooker has to be one. Hooker, last year’s first-round pick, looked like a big-time playmaker early last season, intercepting three passes in just seven games. Then he tore his ACL and MCL. The Colts’ no-name defense needs some names, and they need Hooker healthy. You don’t necessarily want your main building block on defense to be a free safety, but the Colts need to start building a foundation on that side of the ball.

From Yahoo’s Liz Loza: “Don’t draft Andrew Luck. Not because he won’t bounce back, but because you don’t need to take the risk. QB is ridiculously deep this year. For reference, Matt Stafford – who has posted top-eight fantasy numbers for three consecutive seasons – is available after Luck. Patrick Mahomes – a prospect brimming with upside – is going just ahead of the Colts’ signal caller. There is zero reason to gamble on Luck, not just because he hadn’t thrown “The Duke” for most of the offseason, but also because a quarter of his starts will come opposite the Jags and the Texans defensive units.”

[Booms/Busts: Fantasy outlook on the Colts.]

[Yahoo Fantasy Football leagues are open: Sign up now for free]

The Colts have a rookie head coach. Here’s how many career games Frank Reich’s offensive, defensive and special teams coordinators have as coordinators in the NFL: 0. Offensive coordinator Nick Sirianni, defensive coordinator Matt Eberflus and special teams coordinator Raymond Ventrone all deserved a shot, as did Reich, but it’s startling to have first-timers in every key position on the staff. They’ll be coaching a Colts roster that will be among the youngest in the NFL. Maybe all that youthful exuberance will be a positive.

CAN THE RUNNING GAME TAKE SOME PRESSURE OFF THE QB?

Frank Gore is a great player, a true professional, but it was time to move on. The Colts, however, don’t have an easy replacement. Marlon Mack, a 2017 fourth-round pick, wasn’t bad last year but had 10 carries in a game only twice and averaged 2.4 yards per rush in those games. Nyheim Hines is an exciting rookie, but he’s more of a third-down playmaker than a foundation back. Jordan Wilkins might ultimately be the answer but he’s still a fifth-round pick who wasn’t considered an NFL starting-caliber back. The Colts could struggle to keep defenses honest with their run game, even with an upgraded offensive line.

The Colts never finished worse than 8-8 in Andrew Luck’s first five seasons, and those rosters had issues. If the Colts are just being extremely cautious and Luck is going to return good as new, we know what an impact he can have. The Colts were in many close games last season and just couldn’t finish. Perhaps Luck returns and the Colts bounce right back to contention in the AFC South. Honestly, Colts fans would probably settle for Luck returning and playing well, regardless of the team’s record.

What if Andrew Luck is never the same? To use a baseball analogy, maybe he goes from throwing 97 mph before his shoulder issues to throwing in the low 90s on his return (for you baseball fans, think Matt Harvey). The Colts shouldn’t go into this season thinking about the playoffs. The roster isn’t good enough. The real trouble arises if Luck returns but looks like just another guy.

I don’t know. The range of outcomes for Andrew Luck is so wide, it’s impossible to have a great answer. I think Luck plays, and plays fairly well. But the Colts’ roster is so thin, it won’t matter much. They’re going to be bad with or without Luck. Figure on double-digit losses no matter who is at quarterback, but the future looks tremendously brighter if Luck looks like himself in 2018. Fingers crossed.

32. Cleveland Browns

– – – – – – –

Frank Schwab is a writer for Yahoo Sports. Have a tip? Email him at shutdown.corner@yahoo.com or follow him on Twitter! Follow @YahooSchwab

[lindyhunt]

Fixed Cost: What It Is & How to Calculate It

"Business is personal -- it's the most personal thing in the world."

These are famous words by Michael Scott from the TV show, The Office. And although this quote conflicts with the universal belief that business isn't personal, Michael's point of view is perfect when learning about a business's fixed costs -- or those costs that don't change as a company grows or shrinks.

To identify and calculate your business's fixed costs, let's start by looking at the ones you're already paying in your personal life. Then, we'll explain how a business manages its own fixed costs and review some common fixed cost examples.

What Is a Fixed Cost?

Fixed costs are those costs to a business that stay the same regardless of how the business is performing. These costs are known as fixed costs to distinguish them from variable costs, which do change as the company sells more or less of its product.

Fixed Cost Formula

Identify your building rent, website cost, and similar monthly bills.

Consider future repeat expenses you'll incur from equipment depreciation.

Isolate all of these fixed costs to the business.

Add up each of these costs for a total fixed cost (TFC).

Identify the number of product units created in one month.

Divide your TFC by the number of units created per month for an average fixed cost (AFC).

Consider your personal routine. As a single adult, your expenses would normally include a monthly rent or mortgage, utility bill, car payment, healthcare, commuting costs, and groceries. If you have children, this can increase variable costs like groceries, gas expenses, and healthcare.

While your variable costs increase after starting a family, your mortgage payment, utility bill, commuting costs, and car payment don't change for as long as you're in the same home and car. These expenses are your fixed costs because you pay the same amount no matter what changes you make to your personal routine.

In keeping with this concept, let's say a startup ecommerce business pays for warehouse space to manage its inventory, and 10 customer service employees to manage order inquiries. It suddenly signs a customer for a recurring order that requires another five paid customer service reps. While the startup's payroll expenses go up, the fixed cost of a warehouse stays the same.

Average Fixed Cost

Keep in mind you have to keep track of your business's fixed costs differently than you would your own. This is where average fixed cost comes into play.

Average fixed costs are the total fixed costs paid by a company, divided by the number of units of product the company is currently making. This tells you your fixed cost per unit, giving you a sense of how much the business is guaranteed to pay each time it produces a unit of your product -- before factoring in the variable costs to actually produce it.

Let's revisit the ecommerce startup example from earlier. Assume this business pays $5,000 per month for the warehouse space needed to manage its inventory, and leases two forklifts for $800 a month each. And last month, they developed 50 units of product.

The warehouse and forklift costs remain unchanged regardless of how many products they sell, giving them a total fixed cost (TFC) of $5,000 + ($800 x 2), or $6,600. By dividing its TFC by 50 -- the number of units the business produced last month -- the company can see its average fixed cost per unit of product. This would be $6,600 ÷ 50, or $132 per unit.

Fixed Cost Examples

So far, we've identified a handful of fixed cost examples since considering the costs we already pay as individuals. A home mortgage is to a lease on warehouse space, as a car payment is to a lease on a forklift.

But there are a number of fixed costs your business might incur that you rarely pay in your personal life. In fact, some variable costs to individuals are fixed costs to businesses. Here's a master list of fixed costs for any developing company to keep in mind:

Lease on office space: As long as your business operates in the same building, your rent cost doesn't change.

Utility bills: Your heating or cooling bill might fluctuate as seasons change, but it is generally not affected by business operations.

Website hosting costs: When you register your website domain, you pay a small monthly cost that remains static despite the business you perform on that website.

Ecommerce hosting platforms: Ecommerce platforms integrate with your website so you can conduct transactions with customers. They typically charge a low fixed cost per month.

Lease on warehouse space: Warehouses are paid for the same way you'd pay rent on your office space. They do not change in price as you store more or fewer products inside, but can have storage and capacity limits.

Manufacturing equipment: The equipment you need to produce your product is yours once you buy it, but it will depreciate over its useful lifetime. Depreciation can become a fixed cost if you know when you'll have to replace your equipment each year.

Lease on trucks for shipment: Truck leases work the same way as a car payment, and will not charge differently depending on how many shipments you make.

Small business loans: If you're financing a new business with a bank loan, your loan payments won't change with your business's performance. They are fixed for as long as you have a balance to pay on that loan.

Property tax: Your office space's building manager might charge you property tax, a fixed cost for as long as your business is on the property.

Health insurance: Health insurance costs might be a variable cost to an individual if they add or remove dependents from their policy, but to a business, the recurring costs to an insurer are fixed.

Calculating your fixed costs isn't always the most fun part of growing your business. But knowing what they are, and when you'll pay each one, gives you the peace of mind you need to serve and delight your customers.

[schmitzpd6econ-blog]

MC = marginal cost (how much it costs to produce another unit of output). Shape is due to diminishing marginal returns (aka as you hire more and more, the marginal return for each unit of output eventually decreases due to overcrowding) ATC = average total cost. This is equal to AFC + AVC. Lowest where it intersects MC. Shape is due to the fact that it decreases as MC decreases and increases as MC increases. AVC = average variable costs. This is how much it costs to produce more or less output (prices vary. Examples include: raw materials and labor). Lowest where it intersects MC. Shape is due to the fact that it decreases as MC decreases and increases as MC increases. NOTE: A SHIFT IN THIS CURVE WILL SHIFT AVC, ATC, AND MC TO SHIFT EITHER UP OR DOWN. AFC = average fixed costs. Costs business must cover even at zero output. Examples include loan or rent. Shape is due to the fact that because AFC is a fixed number, dividing it by a greater number of output will cause it to continually decrease. NOTE: A SHIFT IN THIS CURVE WILL SHIFT AFC AND ATC EITHER UP OR DOWN.