5. If a firm's total cost is TC-36+402 Which output minimizes the firm's average cost? А....

Question

Question

5. If a firms total cost is TC-36+402 Which output minimizes the firms average cost? А. 3 B. 4 C. 6 D. 12

Answer 1

Answer #1

Answer 5

The correct answer is (A) 3

Average Cost(AC) = TC/Q = (36 + 4Q²)/Q = 36/Q + 4Q

Hence we have to Minimize : AC = 36/Q + 4Q

First order condition :

dAC/dQ = 0 => -36/Q² + 4 = 0 => 4 = 36/Q² => Q² = 9

=> Q = 3

So, Output that minimizes Average Cost is 3 units

Hence, the correct answer is (A) 3

Answer 2

Similar Homework Help Questions

Suppose the firm's total cost and marginal cost functions are given by TC = 54 +...

Suppose the firm's total cost and marginal cost functions are given by TC = 54 + Q + 2Q3 and MC = 1 + 4Q2, respectively. What is the output level that minimizes average total cost? 2 3 6 8
Suppose the firm's total cost and marginal cost functions are given by TC = 64 +...

Suppose the firm's total cost and marginal cost functions are given by TC = 64 + Q +4Q3 and MC = 1+12Q2, respectively. What is the output level that minimizes average total cost? 2 3 6 00
Q: Suppose a firm's total cost function is TC = 16 + 5Q + 4Q2 ....

Q: Suppose a firm's total cost function is TC = 16 + 5Q + 4Q2 . What is the output level that minimizes average total cost?

suppose a firm's total cost of production (TC) is tc=2Q^2 mc=4Q Suppose a firm's total cost...

suppose a firm's total cost of production (TC) is tc=2Q^2 mc=4Q Suppose a firm's total cost of production (TC) is TC = 20 MC = 40 What do the firm's average total cost curve, average variable cost curve, and marginal cost curve look like? Draw the following curves from 0 to 5 units of output. 1.) Using the line drawing tool.graph the firm's average total cost curve and label it ATC 2.) Using the line drawing tool, graph the firm's...
A firm has a total cost curve of TC = 15q² +8q+45. What is the output...

A firm has a total cost curve of TC = 15q² +8q+45. What is the output level that minimizes the firm's average variable cost?
Given the total cost function for a firm is (Q = output and TC = total...

Given the total cost function for a firm is (Q = output and TC = total cost) Q TC 0 0 1 20 2 39 3 56 4 71 5 84 6 95 the average total cost of producing six units of output is $15.83 True OR Flase

Suppose the firm’s total cost and marginal cost functions are given by TC=54+Q+2Q^3 and MC=1+4Q^2, respectively....

Suppose the firm’s total cost and marginal cost functions are given by TC=54+Q+2Q^3 and MC=1+4Q^2, respectively. What is the output level that minimizes average total cost? A. 2 B. 3 C. 6 D. 8
3.5 5. A firm's total-revenue and total-cost functions are TR 40 TC 0.0403-0.90+ 100 +5 (a)...

3.5 5. A firm's total-revenue and total-cost functions are TR 40 TC 0.0403-0.90+ 100 +5 (a) Determine the best level of output. (b) Determine the total profit of the firm at its best level of output.
Suppose a firm's average total cost curve is decreasing with output. What can be said of...

Suppose a firm's average total cost curve is decreasing with output. What can be said of its marginal cost curve? The firm's marginal cost curve must be A. intersecting the average total cost curve. B. increasing with output. C. below the average total cost curve. D. decreasing with output. E. horizontal.

Suppose a firm's cost function is C (q) = 2q2 + 8. The output q that...

Suppose a firm's cost function is C (q) = 2q2 + 8. The output q that minimizes average total cost is: (Hint: At the minimum of the ATC, ATC is equal to MC) a)4 b) 2 c) 0 d) 8