2. PewTooth®, the popular new startup company that manufactures the world's first-ever Bluetooth-enabled church bench, estimated its short-run costs using a U-shaped average variable cost functionof the form AVC = a +bQ+cQ² and obtained the following results. Total fixed cost (TFC) atPewTooth® is $1,140.Adjusted R SquareInterceptQQ^20.853Coefficients37.94-3.450.24StandardError3.510.770.04t Stat P-value10.810.0004-4.480.00036.740.0000a. What level of output (Q) is associated with the minimum AVC? What is the value of AVCat this minimum?b. Determine equations for ATC, TC, and MC. Graph one scatterplot of Q vs. TC, andanother scatterplot of Q vs. ATC, AVC, and MC.c. When output is 12, how much is TC, AVC, ATC, and MC?d.At what amount of output does labor change from exhibiting increasing returns todecreasing returns?

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2. PewTooth®, the popular new startup company that manufactures the world's first-ever Bluetooth- enabled church bench, estimated its short-run costs using a U-shaped average variable cost function of the form AVC = a +bQ+cQ² and obtained the following results. Total fixed cost (TFC) at PewTooth® is $1,140. Adjusted R Square Intercept Q Q^2 0.853 Coefficients 37.94 -3.45 0.24 Standard Error 3.51 0.77 0.04 t Stat 10.81 -4.48 6.74 P-value 0.0004 0.0003 0.0000 a. What level of output (Q) is associated with the minimum AVC? What is the value of AVC at this minimum? b. Determine equations for ATC, TC, and MC. Graph one scatterplot of Q vs. TC, and

2. PewTooth®, the popular new startup company that manufactures the world's first-ever Bluetooth- enabled church bench, estimated its short-run costs using a U-shaped average variable cost function of the form AVC = a +bQ+cQ² and obtained the following results. Total fixed cost (TFC) at PewTooth® is $1,140. Adjusted R Square Intercept Q Q^2 0.853 Coefficients 37.94 -3.45 0.24 Standard Error 3.51 0.77 0.04 t Stat 10.81 -4.48 6.74 P-value 0.0004 0.0003 0.0000 a. What level of output (Q) is associated with the minimum AVC? What is the value of AVC at this minimum? b. Determine equations for ATC, TC, and MC. Graph one scatterplot of Q vs. TC, and

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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