4. Suppose a firm has a total cost (TC) function over its output (y > 0) given by TC(y) = 3y² +7y + 24 (a) What is the firm's average cost function (AC)? (b) What is the firm's marginal cost function (MC)? (c) Over what range of y is the firm's AC declining? (d) Show that (i) MC < AC when AC is declining
4. Suppose a firm has a total cost (TC) function over its output (y > 0) given by TC(y) = 3y² +7y + 24 (a) What is the firm's average cost function (AC)? (b) What is the firm's marginal cost function (MC)? (c) Over what range of y is the firm's AC declining? (d) Show that (i) MC < AC when AC is declining
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![4. Suppose a firm has a total cost (TC) function over its output (y > 0) given by
TC(y) = 3y² + 7y + 24
(a) What is the firm's average cost function (AC)?
(b) What is the firm's marginal cost function (MC)?
(c) Over what range of y is the firm's AC declining?
(d) Show that
(i) MC < AC when AC is declining
(ii) MC = AC at the point where the AC curve is horizontal
(iii) MC > AC when AC is increasing](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1e1f7ce-6847-4965-81f8-e638576c5e85%2F81046e4a-3b80-45ad-b396-2394a772842e%2Fktomsfa_processed.png&w=3840&q=75)
Transcribed Image Text:4. Suppose a firm has a total cost (TC) function over its output (y > 0) given by
TC(y) = 3y² + 7y + 24
(a) What is the firm's average cost function (AC)?
(b) What is the firm's marginal cost function (MC)?
(c) Over what range of y is the firm's AC declining?
(d) Show that
(i) MC < AC when AC is declining
(ii) MC = AC at the point where the AC curve is horizontal
(iii) MC > AC when AC is increasing
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