Consider a firm with the total cost function given by TC(Q) = 2Q² + 100. Choose all the correct statements. Select one or more: a. The marginal cost of this firm is MC(Q) = 4Q. b. The marginal cost of this firm is MC(Q) = 2Q. С. The fixed cost of this firm is FC(Q) = 100. d. The average cost of this firm is AC(Q) = 2Q.
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- In the short run the marginal cost of the first unit of output is $20, the marginal cost of the second unit of output is $16, and the marginal cost of the third unit of output is $14. The firm's total cost of producing three units of output isMonth (m): 4 Day (d): 1 Use the two numbers above, m and d, to complete the cost function for a perfectly competitive firm: Cost (q) = m q2 + d = (30) For a cost function like yours, Marginal Cost (MC) = 2 m q . Specifically, what are the following for the cost function you wrote out above? Fixed Cost = Average Total Cost = Cost (q)/q = Variable Cost = Average Fixed Cost = FC/q = Marginal Cost = 2 m q = Average Variable Cost = VC/q = (15) Fill in the table with your values from your cost function. q Total Cost AVC AFC ATC MC 0 0 0 -- -- -- 1 2 3 4 5 6Suppose the firm achieves total revenue of $1,000 by selling 150 units while facing total costs of $900. If the firm produces and sells 151 units, its total revenue is $1,005, and its total costs are $950. Should the firm produce and sell the extra unit? Group of answer choices yes, since marginal profit is positive yes, since profits are positive no, since marginal profit is negative no, since marginal profit is positive You have recently learned that the company where you work is being sold for $1,000,000. The company's income statement indicates next year's profits of $30,000, which have yet to be paid out as dividends. Assuming the company will remain a "going concern" indefinitely and the interest rate will remain constant at 7%, at what (constant) rate does the owner believe that profits will grow? (Hint: the price the owner was willing to pay is the present value of the firm's future cash flows) Group of answer choices 6% 5% 4% 4.5%
- Q4) A firm’s short-run cost function is C(q) = 100q - 5q2 + 0.3q3 + 400. a) Determine the fixed cost, F; the variable Cost, VC b) The average fixed cost AFC, the average variable cost, AVC; the average total cost, AC c) the marginal cost, MC d) If q= 10 find FC,VC, AFC, AVC, ATC and MCA competitive firm has the following average cost function: AC=y2 - 8y + 30 + 5/y. The corresponding marginal cost function is MC = 3y2 - 16y + 30 a) Derive the total cost function, then find the firm’s average variable cost, average fixed cost, and fixed cost. Is this firm in the short run or the long run? How do you know? b) At what quantity is marginal cost equal to average variable cost? At what quantity is average variable cost minimized? The firm will supply zero output if the price is less than what? c) What is the smallest positive amount that the firm will ever supply at any price? At what price would the firm supply exactly 6 units of output?Suppose a firm faces a cost function of C = 8 + 4q + q^2, so that its marginal cost is MC=4 + 2q. a) What is the firm's fixed cost. F? b) What is the formula for the firm's variable cost (VC), Average Cost (AC), and Average Variable Cost (AVC)? c) On a diagram, draw the AC, AVC, and MC curves.
- Which of the following statements is (are) correct? (x) In the short run, if a firm produces nothing, then, by definition, fixed costs will equal zero. (y) Fixed costs can be defined as costs that are incurred even if nothing is produced. (z) Although fixed costs do not vary as a firm varies the output amount that it produces, average fixed costs for the firm do vary as the amount of output varies. (x), (y) and (z) (x) and (y) only (x) and (z) only (y) and (z) only (z) onlyWhich of the following is correct if the firm described in Figure 7-4 decides to produce nothing? a. Total cost will be zero. b. Total fixed cost will be zero. c. Total variable cost will be zero. d. Average cost will be zero. e. It is impossible for the firm to produce nothing in the short run.Suppose Honda’s total cost of producing 4 cars is $225,000 and its totalcost of producing 5 cars is $250,000. What is the average total cost of producing 5 cars? What is the marginal cost of the fifth car? • Draw the marginal-cost curve and the average-total-cost curve for a typical firm, and explain why these curves cross where they do.
- In the short run, if a marginal cost of a firm in a competitive industry is increasing while its average variable cost is upward sloping, what can you say about slope of average total cost?Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's economic and accounting profits in the short run? Question 4 options: Economic profits are $20 and accounting profits are minus $10 Economic profits are $40 and accounting profits are $0 Economic profits are minus $10 and accounting profits are $20 Economic profits are $0 and accounting profits are $40Suppose a firm has following total cost function: TC=(2Q+4)(Q+3)+240. Find the fixed cost (FC), total variable cost (TVC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC) for this firm.