Question

Keep c(y) = 200−10y+ 0.5y^2
as the cost function of the firm.
a) What is the average cost of producing y units of output?
b) What, therefore, will be the optimum output in the long run (y*LR)?
c) What is the average cost at the optimum output?
d) What is the long run market price, p*LR?
e) What is the firm’s total revenue in the long run?
f) What is the firm’s total cost in the long run?

Answer 1

CCY)= 200-10y + 0.572 a Avrage cost of producing y uits of outputs co 200 - 10+0.5 y У Y у ACCY) - C(y) 20 to.s dy ور long run b) for optium output in the long run, Ac should be mininisdoor LCACCY) ya 20 -0.5 =) 0.sy z 200 ya = y2 = 400 2) Y=20 optimum output in the 20nts. & À NOW, ACCY) at ACCY) = 200 y 202 -10 +0.5X20) = 10 1040 =10 Y= 20 20 $10 de Long sus manket price will be PER ACLY) =) pt 2 = 9 10 Total revome in the longus, (PZR *Y) - 20x10)- 4200 Total cost in the long run CCY) = 200-107 +0.5y2 * 20-110x20) + 0.5(20) Ĉ $ 200 62 CS Scanned with CamScanner