A firm has the following information on production and costs from past data:Output (Y)061218Total Cost (TC)9277553618199If the total cost function is known to be TC=aY3+bY2+kY+f, and the demand for the product of the firm is Y=320-(1/2)P. answer the following:Determine the coefficient of the cubic cost function.Derive all cost and revenue curves and the profit function.Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all points.

Cost function: TC= aY3+bY2+kY2+f ...........(1) First, we have to find the value of a, b, k, and…

Answered: A firm has the following information on…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm has the following information on production and costs from past data:

Output (Y)	0	6	12	18
Total Cost (TC)	9	2775	5361	8199

If the total cost function is known to be TC=aY³+bY²+kY+f, and the demand for the product of the firm is Y=320-(1/2)P. answer the following:

Determine the coefficient of the cubic cost function.
Derive all cost and revenue curves and the profit function.
Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all points.

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