Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter34: International Finance
Section: Chapter Questions
Problem 2WNG
Related questions
Question
Is average cost minimized at q= 2, q= 5, q= 10, or q= 15 for the cost curve graphed below? Provide reasoning for your answer.
Transcribed Image Text:3,000
2,000
1,000
0 2
10
15
Expert Solution
Step 1
Average cost(AC) is minimized when q=10. At q=2, TC curve is increasing at increasing rate. At this stage the firm enjoys increasing returns to factor & hence AC does no minimize here.
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