Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter9: Applications Of Cost Theory
Section: Chapter Questions
Problem 3E
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Question
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The chief economist for Argus Corporation, a large appliance manufacturer, estimated the firm’s short-run cost function for vacuum cleaners using an
Dependent Variable | AVC | R-SQUARE | F-RATIO | P-VALUE ON F |
OBSERVATIONS | 19 | 0.7360 | 39.428 | 0.0001 |
PARAMETER ESTIMATE | STANDARD ERROR | T-RATIO | P-VALUE | |
VARIABLE INTERCEPT | 191.93 | 54.65 | 3.512 | 0.0029 |
Q | -0.0305 | 0.00789 | 23.866 | 0.0014 |
Q2 | 0.0000024 | 0.00000098 | 2.449 | 0.0262 |
Quetsion: At what level of output will average variable cost be at a minimum? What is the minimum average variable cost?
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