Homework Answers
Answer:
Total cost = 3Q^2
ATC = TC/Q
ATC = 3Q^2/Q
ATC = 3Q
MC calculation:
Total Cost function = 3Q^2
MC = 6Q
MR calculation
Q = 10 - 0.5P
0.5P = 10 - Q
P = 20 - 2Q
TR = P*Q
TR = 20Q - 2Q^2
MR = 20 - 4Q
Equilibrium quantity is at MR = MC
6Q = 20 - 4Q
10Q = 20
Q = 2
Putting Q = 2 in ATC
ATC = 3Q
ATC = 3*2
ATC = 6
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