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5.  Explain the difference between total cost, average cost, and marginal cost.

5.  Explain the difference between total cost, average cost, and marginal cost.

:Total cost is the entire costs that a firm has when it starts, such as the cost of the building and equipment. Average cost equals this total cost divided by the quantity of goods produced, which is TC/Q.  Marginal cost is the additional expense for making one additional unit.

:Total cost is the entire costs that a firm has, including all fixed and variable costs. Average cost equals this total cost divided by the quantity of goods produced, which is TC/Q.  Marginal cost is the additional expense for making one additional unit.

6.  Suppose you decide you could profitably set the price for a homeschool dinner event at $15 per ticket, and it would have attracted 150 people.  You also determine that 50 out of the 150 people who would have attended would have paid $20 per ticket and 10 out of the 150 would have paid $25 per ticket, and 5 out of the 150 would have paid $30 per ticket, because they would have enjoyed and benefited so much from it.  However, this homeschool dinner event was never held because no one "got around to it."  What is the loss in wealth or consumer surplus due to the fact that the event was ''not'' held?

6.  Suppose you decide you could profitably set the price for a homeschool dinner event at $15 per ticket, and it would have attracted 150 people.  You also determine that 50 out of the 150 people who would have attended would have paid $20 per ticket and 10 out of the 150 would have paid $25 per ticket, and 5 out of the 150 would have paid $30 per ticket, because they would have enjoyed and benefited so much from it.  However, this homeschool dinner event was never held because no one "got around to it."  What is the loss in wealth or consumer surplus due to the fact that the event was ''not'' held?