QUESTION Given TC = 100 + 60Q – 12Q2 + Q3 find: (a) The equations of the TVC, AVC, and MC functions. (b) The level of output at which AVC and MC are minimum, and prove that the AVC and MC curves are U-shaped. (c) Find the AVC and MC for the level of output at which the AVC curve is minimum

QUESTION Given TC = 100 + 60Q – 12Q2 + Q3 find: (a) The equations of the TVC, AVC, and MC functions. (b) The level of output at which AVC and MC are minimum, and prove that the AVC and MC curves are U-shaped. (c) Find the AVC and MC for the level of output at which the AVC curve is minimum

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: Production And Costs

Section: Chapter Questions

Problem 9WNG

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

QUESTION

Given TC = 100 + 60Q – 12Q2 + Q3

find:

(a) The equations of the TVC, AVC, and MC functions.

(b) The level of output at which AVC and MC are minimum, and prove that the AVC and MC curves are U-shaped.

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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