Question: The Deering Manufacturing Company's short- run average cost function in 2012 was AC = 3 + 4Q where AC is the firm's average cost (in

The Deering Manufacturing Company's short- run average cost function in 2012 was
AC = 3 + 4Q
where AC is the firm's average cost (in dollars per pound of the product), and Q is its output rate.
a. Obtain an equation for the firm's short- run total cost function.
b. Does the firm have any fixed costs? Explain.
c. If the price of the Deering Manufacturing Company's product (per pound) is $3, is the firm making profit or loss? Explain.
d. Derive an equation for the firm's marginal cost function.

Step by Step Solution

★★★★★

3.45 Rating (171 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a We know that AC TCQ Therefore we have TC QAC That is TC 3Q 4Q 2 b No the firms total ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

803-B-E-M-E (6255).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Touchie MacFeelies irascible business manager, Gander Mac- Grope, announces that old jokes can be purchased for $1 each and that the wage rate of cartoonists labor is $2. (a) Suppose that in the...

A firm producing hockey sticks has a production function given by q = 2 K L In the short run, the firms amount of capital equipment is fixed at K = 100. The rental rate for K is v = $1, and the wage...

Suppose that Hannah and Sam have the Cobb-Douglas production function Q = F(L,K) = 10L0.25K0.25 Both a worker and a unit of capital cost $1,000 per week. If Hannah and Sam begin by remodeling 100...

Question 4 (20 minutes) The province wishes to improve our environment and accordingly will subsidise your municipality $ 2 for every $1 you spend on sewage facilities up to a maximum of $ 1920. Your...

tax Consider the market for apple juice. In this market, the supply curve is given by QS = 10PJ 5PA and the demand curve is given by QD = 100 15PJ + 10PT , where J denotes apple juice, A denotes...

Please this assignment it's due in 2 hours Midnight. Can you please help me with drawing a graph as well. I will appreciate it 6. Deriving the short-run supply curve The following graph plots the...

Necessary information has been given for the following questions. Consider the following Diamond economy (Le., the Overlapping Generations Model: OLG). In every period f with t = 0, 1,2, .., there...

Dear Tutor I need also help with graph please drawing it will help me as well thank you. 7. Short-run supply and long-run equilibrium Consider the competitive market for rhodium. Assume that no...

7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same...

1) Portia owns and manages a sporting apparel company. Consider the given average cost (AC), average variable cost (AVC), and marginal cost (MC) curves for track suits. All but the MC curve have been...

Very Good Building Co. is an architectural services company and uses the accrual basis of accounting. After recording all transactions for the month of December, but before making any adjustments,...

In the television game show Deal or No Deal, contestant Elna Hindler had to choose between acceptance of an offer of $193,000 or continuing the game. If she continued to refuse all further offers,...

Average minutes per week on the Internet. Refer to the previous exercise. (a) Give the mean and standard deviation in minutes. (b) Calculate the 95% confidence interval in minutes from your answer to...

The standard deviation of the sampling distribution of mean differences between dependent samples in a two-group experiment is the .

The French government announced plans to convert state-owned power firms EDF and GDF into separate limited companies that operate in geographically distinct markets. BBC News reported that Frances...

The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the...

Last month you assumed the position of manager for a large car dealership. The distinguishing feature of this dealership is its no hassle pricing strategy; prices (usually well below the sticker...

LESLI CORPORATION Balance Sheet Income Statement Assets: Sales (all credit) $5,800,000 Cash $150,000 Cost of goods sold -3,000,000 Accounts receivable 450,000 Operating expense -900,000 Inventory...

Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -28,100 -28,100 1 13,500 3,850 2 11,400 9,350 3 8,750 14,300 4 4,650 15,900 Project A...

If the simple CAPM is valid, is the situation shown below possible? Possible Not possible If the simple CAPM is valid, is the situation shown below possible? Possible Not possible If the simple CAPM...