March/June 2016-I watched you lecture video for Swim co.
Number of Athletes----0-------100----------200--------------300--------------400------------500
Fixed cost------------20000---20000-------40000------------40000----------40000---------40000
Variable cost------------0-------20000-----40000--------------50000----------66667
Total cost----------20000------40000-------80000------------90000----------106667
Fixed cost per Ath========200=======200=========133.333===100
Variable cost p.a==========200=======200========166.666===166.666
Total cost per.ATH=========400=======400===========300======266.667
if economies of scale starts from 300 athleetes does it mean variabe cost per athlete will remain the same per athlete regardless of athelete numbers?I tried to find total cost when the line on exactly 400 but it is not possible to take accurate figure to be sure that what variable cost will be?I took variable cost (166.666) per athlere when athlete numbers reached 400 athletes and since i know fixed is 40000 divided it into 400 so 100?Iagain after reaching economies scale do i have to take variable cost per athlete the same when reaching 400?
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5y ago#1I really do not know why you are doing all of this work, because none of it was required.
The fixed costs (line C) are constant if there are more than 200 athletes.
Line B is obviously showing the fixed + variable costs and you can see from the chart that when it goes above 300 athletes the angle changes and gets steeper. Given that the fixed cost is not changing at that level, it must mean that the variable cost per athlete increases.
Dear Tutor I know that the line b represents total cost and line c represents fixed cost.Till 300 I found variable cost per unit total cost per unit and fixed per unit but above 300 units I just became stuck.
When i watched the answer,it says the variable cost per athlete will remain unchanged meaning will be 166.67$ per athlete above 300 because of line becane steeper?
5y ago#3The examiners answer is a bit muddled.
When the angle of the line stays the same, the variable cost per athlete is constant. When the angle becomes steeper then the variable cost per athlete is higher, when it is less steep the veritable cost per athlete is lower.
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