A firm has an average cost function A(q) =125 +q^2 - 4 q 16 where q is the firm′s output. (iv) Write an equation for the total cost function. (v) Hence calculate the level of output for which total costs are minimum.
A firm has an average cost function A(q) =125 +q^2 - 4 q 16 where q is the firm′s output. (iv) Write an equation for the total cost function. (v) Hence calculate the level of output for which total costs are minimum.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
Section: Chapter Questions
Problem 3.7IP
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b) A firm has an average cost function
A(q) =125 +q^2 - 4
q 16
where q is the firm′s output.
(iv) Write an equation for the total cost function.
(v) Hence calculate the level of output for which total costs are minimum.
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