2. Consider the following table regarding the production of Blue Mountain Jamaican coffee.
Output
(cases)
Total Fixed
Costs ($)
Total Variable
Costs ($)
Total
Costs ($)
Average Fixed
Cost ($/case)
Average
Variable Cost
($/case)
Average Total
Cost ($/case)
Marginal Cost
($/case)
1 150 30
2 50
3 60
4 64
5 90
6 125
7 173
8 238
a) Fill in the missing columns. (6 marks)
b) At what level of output does this coffee plantation experience increasing marginal costs? (1 mark)
c) At what level of output does this coffee plantation experience increasing average total costs? (1 mark)
d) What is the plantation’s shutdown price? Explain. (2 mark
