1. A. (12 Points - 4 Points each) Given the total cost function

TC = 200 + 80Q - 30Q2 + 4Q3, calculate the following (TFC = 100):

a. Average Fixed Cost (AFC)

AFC =

b. Average Variable Cost (AVC)

AVC =

c. Marginal Cost (MC)

MC =

B. (8 Points - 4 Points each) If a production function is given by the equation

Q = 24X + 20X2 - X3, where Q = Output and X = Input

Calculate the equations for the following:

1. Average Product (AP)

AP =

b. Marginal Product (MP)

MP =

16. Short-Run Market Supply (10 Points - 5 points each). Carolina Textiles, Inc., is a small manufacturer of cotton linen that it sells in a perfectly competitive market. Given $100,000 in fixed costs per day, the daily total cost function for this product is described by:

TC = $100,000 + $2Q + $0.0625Q2

MC = dTC/dQ = 2 + .125Q

where Q is units of cotton linen produced per day. Assume that MC > AVC at every point along the firm's marginal cost curve, and that total costs include a normal profit.

Derive the firm's supply curve (supply equation), expressing quantity as a function of price (remember that P = MR in a perfectly competitive market).

Develop the firm's total variable cost (TVC) and average variable cost (AVC) equations?