Suppose an electricity generating firm exists with the following cost functions, C(Q) = 2Q^2 + 3Q + 72, FC = 72, MC(Q) = 4Q + 3, AC(Q) = 2Q + 3 + (72/Q), AVC(Q) = 2Q + 3

Graph the AC(Q), the AVC(Q), the MC(Q) on the same graph below.  Hint, this is easiest to do by creating a schedule with quantity from 1 – 10 and calculating the corresponding costs for each quantity.  I.e., when Q = 1, the AVC =? MC=? AC=?   (6 pts)

Now using the char from above, how much profit does the firm receive at a price of $27?

Now using the charts and equations from above, how much profit does the firm receive at a price of $39?  Hint:  Show your work and find the quantity sold and calculate the revenues and costs. (3 pts)

Answer rating: 100% (QA)

To graph the ACQ AVCQ and MCQ we can create a table of quantities from 1 to 10 and calculate the cor... View the full answer