Chapter2: Mathematics For Microeconomics
Section: Chapter Questions
Problem 2.8P
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Question
Transcribed Image Text:(5) On your graph, indicate the supply curve of your firm in the short run.
Transcribed Image Text:Econ 201.
Name
Assume that this is the cost function for a perfectly competitive firm: Cost (q) = 5 q' + 20
For this cost function, Marginal Cost = MC = 10 q .
Fill in the table with your values from your cost function.
Total Cost
AVC
AFC
ATC
MC
20
--
1
3
3) For any cost function, you can find min A
setting ATC =
Land solving for q.
Create a graph showing the minimum of
function,
Add AVC and MC to your graph.
) Here MC is always increasing. As q increa
nappens to ATC when it is less than MC and w
happens to ATC with is more than MC?
At what level of production is AVC at its minimum? (the table you made is enough information for you to fin
value.) For any price, will your firm always be able to cover its variable cost?
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