Question
Suppose a firm has the long-run total cost function TC = q-40q+600q. %3D (a) Calculate the average cost function for this firm [1 mark]
Suppose a firm has the long-run total cost function TC = q-40q+600q. %3D (a) Calculate the average cost function for this firm [1 mark] (b) At what output does the average cost equal the minimum? What is the average cost at this level of output? [2 marks] (c) What is the marginal cost function for this firm? At what level of output will it cross the average cost curve? [2 marks]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a Average cost Total cost quantity q 3 40q 2 600qq Average cost q 2 40q 600 b Fi...
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Step: 2
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Managerial Economics
Authors: Paul Keat, Philip K Young, Steve Erfle
7th edition
0133020266, 978-0133020267
