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A firm has fixed costs of $60 and variable costs as indicated in the table below. For each level of output total product, calculate total fixed cost, total cost, average fixed cost, average variable cost, average total cost and marginal costQ4. Draw the typical relationship between short and long run average costs. Using the graph explain how the average cost changes in the short run when output increases. Again using the graph explain how the situation changes when, given the same increase in output, firms are in the long run. Q5.
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