Homework Answers
Here AC = 2Q + 5 +30/Q . We know TC = AC* Q
So TC = ( 2Q + 5 + 30/Q)* Q = 2Q2 +5Q + 0
We also know differentiating TC w.r.t Q, we get MC
So MC = derivative of TC wrt Q
= 4Q + 5
Now given quantity = 50, there fore MC = 4(50) + 5
= 205
The graph of the MC curve is plotted below
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6. Suppose you are given the average cost function, AC=2Q+5+ 30/Q. Using calculus, determine the...
6. Suppose you are given the average cost function, AC=2Q+5+ 30/Q. Using calculus, determine the marginal...
6. Suppose you are given the average cost function, AC=2Q+5+ 30/Q. Using calculus, determine the marginal cost associated with this function. Determine the value of the firm's marginal cost when Q=50. Graph the MC function with MC on the vertical axis and Q on the horizontal.
2. Find an expression for the MC function given the following average cost functions (a) AC...
2. Find an expression for the MC function given the following average cost functions (a) AC 20 5+30/Q (b) AC 302-4Q+6+100/Q In each case 1) state the value of fixed cost and variable cost, and 2) calculate the value of marginal cost when Q 50
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Question 1. Cost concepts The concepts of "marginal cost" (MC) and "average cost" (AC) are routinely used in economics. (a) Suppose the total cost function is C(q) = 9+0.250, where is the output level of the firm. Derive the marginal cost and the average cost implied by this cost function. Provide a diagram (with q on the horizontal axis) to illustrate the shape of these MC and AC functions. (b) What does returns to scale mean? Does a firm with...
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6. Suppose you are given the average cost function, AC=2Q+5+ 30/Q. Using calculus, determine the marginal cost associated with this function. Determine the value of the firm's marginal cost when Q=50. Graph the MC function with MC on the vertical axis and Q on the horizontal.
2. Find an expression for the MC function given the following average cost functions (a) AC 20 5+30/Q (b) AC 302-4Q+6+100/Q In each case 1) state the value of fixed cost and variable cost, and 2) calculate the value of marginal cost when Q 50
2. (54 points) Short-run costs. Suppose w 1, r 10 and K 20. C )q3 +200 a) (5 points) We have TC = WG) q3 + rK = On one graph (with q on the horizontal axis), graph the Total Cost, Variable Cost, and Fixed Cost functions. Pay attention to the shape of the curves, where they intercept the axes and each other (if they do), and the position of the curves relative to each other b) (9 points) Using...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is average weekly household income, and that the firm's marginal cost function is given by MC(Q) 2Q. The firm has no fixed costs. = (a) If the average weekly household income is $600, find the firm's marginal revenue function. (b) What is the firm's profit-maximizing quantity of output? At what price will the firm sell that output? What will the firm's marginal cost be? (c)...
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The marginal cost curve is given by MC 0.+0.1Q. (a) Find the minimum efficient scale for the above cost function (b) What is the firm's minimum average cost? (c) Suppose you have many identical firms in a long run competitive equilibrium. Demand is P 13.1-0.040. What is the market quantity? How many firms are there? (d) Suppose demand increases to P...
Question 1. Cost concepts The concepts of "marginal cost" (MC) and "average cost" (AC) are routinely used in economics. (a) Suppose the total cost function is C(q) = 9+0.250, where is the output level of the firm. Derive the marginal cost and the average cost implied by this cost function. Provide a diagram (with q on the horizontal axis) to illustrate the shape of these MC and AC functions. (b) What does returns to scale mean? Does a firm with...
5. Suppose that a competitive firm's marginal cost of pro- ducing output q is given by MC(q) = 3 + 2q. Assume that the market price of the firm's product is $9. a. What level of output will the firm produce? b. What is the firm's producer surplus? c. Suppose that the average variable cost of the firm is given by AVC(q) = 3 + q. Suppose that the firm's fixed costs are known to be $3. Will the firm...
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