There are two questions to this problem set please answer both:

1.)

Suppose a representative firm has the following cost function: C( q) = a + a , q+ a 2 q?, where q defines the output of an individual firm, and do, a , and a 2represent parameters of the model. Derive the firm's average variable cost function. O AVC(q) = a] + a/q + a2q AVC(q) = a19+ 0292 O AVC(q) = 01 + 02q AVC(q) =a1 +202qSuppose a representative firm has the following cost function: C(q) - a, + a q+ a 2 q2, where q defines the output of an individual firm, and do, a , and a arepresent parameters of the model. Derive the firm's fixed costs. FC(q) - go FC(q) - a FC(q) - 0 FC(q) -a2