1. The total cost of producing a quantity q is C(q). The average cost a(q) is given in figure below. The following rule is used by economists to determine the marginal cost C'(q0), for any qo: Construct the tangent line ti to a(q) at qo. Let t, be the line with the same vertical intercept as t, but with twice the slope of t, . Then C'(q0), is the vertical distance shown in figure below. Explain why this rule works. $/unit a(q) t2 t1 C'(qo)
1. The total cost of producing a quantity q is C(q). The average cost a(q) is given in figure below. The following rule is used by economists to determine the marginal cost C'(q0), for any qo: Construct the tangent line ti to a(q) at qo. Let t, be the line with the same vertical intercept as t, but with twice the slope of t, . Then C'(q0), is the vertical distance shown in figure below. Explain why this rule works. $/unit a(q) t2 t1 C'(qo)
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 18PAE
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![1. The total cost of producing a quantity q is C(q). The average cost a(q) is given in figure
below. The following rule is used by economists to determine the marginal cost C'(q0), for
any qo:
Construct the tangent line ti to a(q) at qo.
Let t, be the line with the same vertical intercept as t, but with twice the slope of t, .
Then C'(q0), is the vertical distance shown in figure below. Explain why this rule works.
$/unit
a(q)
t2
t1
C'(qo)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe157a4cf-1f60-45fa-ab06-a8efcbed546d%2F17b7bb13-5e9a-4241-b56c-89a109df7c22%2Fbcdal8h.jpeg&w=3840&q=75)
Transcribed Image Text:1. The total cost of producing a quantity q is C(q). The average cost a(q) is given in figure
below. The following rule is used by economists to determine the marginal cost C'(q0), for
any qo:
Construct the tangent line ti to a(q) at qo.
Let t, be the line with the same vertical intercept as t, but with twice the slope of t, .
Then C'(q0), is the vertical distance shown in figure below. Explain why this rule works.
$/unit
a(q)
t2
t1
C'(qo)
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