8.3 The long-run total cost function for a firm producing skateboards is TC=q^3-30q^2+350q, where q is the number of skateboards per week. a. What is the general shape of this total cost function? b. Calculate the average cost function for skateboards. What shape does the graph of this function have? At what level of skateboard output does average cost reach a minimum? What is the average cost at this level of output? c. The marginal cost function for skateboards is given by MC=3q^2-60q+350. Show that this marginal cost curve intersects average cost at its minimum value.
8.3 The long-run total cost function for a firm producing skateboards is TC=q^3-30q^2+350q, where q is the number of skateboards per week. a. What is the general shape of this total cost function? b. Calculate the average cost function for skateboards. What shape does the graph of this function have? At what level of skateboard output does average cost reach a minimum? What is the average cost at this level of output? c. The marginal cost function for skateboards is given by MC=3q^2-60q+350. Show that this marginal cost curve intersects average cost at its minimum value.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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8.3 The long-run total cost function for a firm producing skateboards is
TC=q^3-30q^2+350q,
where q is the number of skateboards per week.
a. What is the general shape of this total cost function?
b. Calculate the average cost function for skateboards. What shape does the graph of this function have? At what level of skateboard output does average cost reach a minimum? What is the average cost at this level of output?
c. The marginal cost function for skateboards is given by
MC=3q^2-60q+350.
Show that this marginal cost curve intersects average cost at its minimum value.
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