Homework Answers
4)MC=10+2y
While making MC , ATC ,and AVC curve we need to mention some points.
* As .MC tells that total cost is strictly increasing,so three curve will be strictly increasing.
* MC curve will always above AVC.
* ATC=AVC+AFC, shows ATC will always above AVC but as quantity Increases ,the gap between them Decreases but both Never intersect each other.
* At quantity =1 , MC = ATC
If you show these conditions on graph ,then you don't need to calculate values for different QUANTITY.
B)The profit Maximizing QUANTITY is where ;
MC=P
So 10+2Q=P
Q*=0.5P-5
If P=50
Q*=0.5*50-5=25-5=20
If p=50 then it will produce 20 units
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to figure out MC, AC and AVC dont you have to enter values for
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