Read the description below, then in 1 to 2 pages, answer the following questions that follow.
The costs associated with producing six widgets are as follows: .80 variable cost per widget and .10 fixed cost per widget. Using this information, complete the following calculations:

What is the total cost of producing six widgets?
What is the average total cost of producing six widgets?
If the variable cost of producing five widgets is .60 and the fixed cost for producing five widgets is .10, what is the marginal cost of producing the sixth widget?
How would each of the following affect average total cost, average variable cost, and marginal cost?
An increase in the cost of the lease of the firm’s building
A reduction in the price of electricity
A reduction in wages
A change in the salary of the president of the company
Imagine 2 other situations that would affect the costs and explain their effects.
Present your calculations and assessments of the above situations in a 2-3 page report.
Submission Instructions
To attach your file, click the “add a file” button. Next, select the file you wish to attach from the menu box. Check to make sure that your file has successfully uploaded. If you need to upload an additional file, click the “add another file” button and repeat the process. Once you are finished uploading your files, the “Submit Response for Grading” button should become active. Click on that button and wait for the submission to finalize before navigating away from the exercise page. Before submitting your exercise, please make sure that the file is a common file type (such as Word, PowerPoint, PDF, etc.) and that the privacy settings enable access to viewing your file. This will ensure that the evaluator will be able to view it.
If you need to submit a weblink to a video or other file, please paste the URL into the textbox below. For all weblinks, particularly videos, please make sure that the privacy settings allow the grader access to the file. If you set up the file with a password, be sure to provide it to the grader in the textbox. You can also use the textbox to provide any specific instructions to the grader (such as explaining the file titles you submitted). Do not use the textbox to submit an exercise for grading that should be submitted as a file.
Exercise Self Assessed
What does it mean to say there are no fixed costs in the long-run?