Compute the average cost for technology 2.

AC

2

(q)=

Compute the average cost for technology 1.

AC

1

(q)=

Despondent over the Red Sox's terrible season, Prof. Gruber decides to quit his day job and start a bicycle manufacturing firm in Kendall Square. As he starts looking into the bicycle manufacturing industry, he realizes it has some interesting features. First, he realizes that it operates as a competitive industry. Second, he finds that there are two technologies used by firms in the industry. Technology 1 uses solar power, and has a cost function C' (q) = q + 4q2 + 32 for q > 0. Technology 2 uses electricity from the grid and is more efficient, with a cost function C (q) = q + 2q2 + 32 for q > 0. Assume that we are in the long run, so firms using both technologies can shut and leave the market at 0 cost, so that C (0) - 0 for both technologies. Compute the marginal cost for technology 1. MC (q) = O 1+ 4q+- 32 q 1 + 8q 1+ 2q+ 32 0 1+ 4q None of the above Compute the marginal cost for technology 2.Compute the marginal cost for technology 2. MC2 ( q) = O 1 + 2q + 32 O 1+ 4q O 1 + 4q + 32 O 1 + 8q None of the above Compute the average cost for technology 1. AC' (q) = 1+ 8q O 1+ 4