You are given the following cost functions: TC = 100 + 60Q - 3Q2 + 0.1Q3 TC = 100 +
TC = 100 + 60Q - 3Q2 + 0.1Q3
TC = 100 + 60(J + 3Q2
TC = 100 + 60Q
a. Compute the average variable cost, average cost, and marginal cost for each function. Plot them on a graph.
b. In each case, indicate the point at which diminishing returns occur. Also indicate die point of maximum cost efficiency (i.e., the point of minimum average cost).
c. For each function, discuss the relationship between marginal cost and average variable cost and between marginal cost and average cost. Also discuss the relationship between average variable cost and average cost.
This problem has been solved!
Do you need an answer to a question different from the above? Ask your question!
Step by Step Answer:
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: June 20, 2016 00:33:08