Question

11 Question (5 points) Afirm sells liquid gold in a competitive market. The firm's cost function is c(y) = – 25.00y2 + 700y + 40,320, where y stands for the pounds of gold liquefied and sold by the firm. In the questions below, provide your answers to the nearest two decimals. 2nd attempt Part 1 (2 points) Feedback See Hint The postive level of output (pounds of liquid gold) at which the firm experiences the lowest possible marginal cost is ® 40.50 units. The marginal cost at that point is $ 40.50 Part 2 (2 points) Feedback See Hint The positive level of output (pounds of liquid gold) at which the firm experiences the lowest possible average variable cost is 40.50 units. The marginal cost at that point is $ 40.50 . Part 3 (1 point) Feedback See Hint

Answer 1

Answer:

Given,

C(gy) = TC | تن - 25.00g2+ 700g + 40320

Hence, and

- 25.00y2 + 7007 AVC = 3 = - 25.00y + 700

MC 25.00y2 + 700y + 40320) = y2 – 50y + 700

Part-1:

We know that minimum positive level of output is 1 (i.e. y=1) and at this output the firm experience the lowest possible marginal cost. Thus plugging y=1 on the MC equation we get,

MC(at y = 1) = y2 - 50y + 700 = 12 – 50 * 1 + 700 = 1 - 50 + 700 = 651

Part-2:

We know that minimum positive level of output is 1 (i.e. y=1) and at this output the firm experience the lowest possible average variable cost. Thus plugging y=1 on the AVC equation we get,

AV C(at y = 1) = - 25.00g + 700 = سنا | تت - 25.00 * 1+ 700 = 675.3