Question: 2.1. Given the total cost function: IC=2q+5q+1800 a) Find the output at which average cost is at its minimum. (5) b) Find the minimum level

2.1. Given the total cost function: IC=2q+5q+1800 a) Find the output

2.1. Given the total cost function: IC=2q+5q+1800 a) Find the output at which average cost is at its minimum. (5) b) Find the minimum level of AC at this point. (3) c) Show that AC is at its minimum when q = 4, and that MC = AC at this output. (4) d) Sketch the graphs of the MC and AC functions, on the same axes. (5) e) If the IC function is linear, on what assumptions can MC = AC? (2)

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