Question: Consider estimation of a short-run average variable cost function of the form AVC = a + bQ + cQ 2 Using time-series data, the estimation

Consider estimation of a short-run average variable cost function of the form

AVC = a + bQ + cQ²

Using time-series data, the estimation procedure produces the following computer output: DEPENDENT VARIABLE: AVC R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 15 0.4135 4.230 a. Do the parameter estimates have the correct signs? Are they statistically significant at the 5 percent level of significance?b. At what level of output do you estimate average variable cost reaches its minimum value?c. What is the estimated marginal cost curve?d. What is the estimated marginal cost when output is 700 units?e. What is the estimated average variable cost curve?f. What is the estimated average variable cost when output is 700 units?

DEPENDENT VARIABLE: AVC R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 15 0.4135 4.230 0.0407 PARAMETER STANDARD VARIABLE ESTIMATE ERROR T-RATIO P-VALUE INTERCEPT 30.420202 6.465900 4.70 0.0005 Q -0.079952 0.030780 -2.60 0.0232 Q2 0.000088 0.000032 2.75 0.0176

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AVC a b Q C Q 2 With estimated parameters we nave AVC 30420202 0079952Q 0000088Q 2 ... View full answer

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