Assume a competitive firm faces a market price of $120, and a cost curve of: C = 0.004q° + 25q + 750. Marginal cost (MC) equals MC = (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g, a superscript can be created with the ^ character.) %3D

Assume a competitive firm faces a market price of $120, and a cost curve of: C = 0.004q° + 25q + 750. Marginal cost (MC) equals MC = (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g, a superscript can be created with the ^ character.) %3D

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 Chinese high technology manufacturing firm has a production function of 0.80 0.20 q=16L (based on Zhang, et al., 2012). It faces prices of w=$8 and r= $2. What are its short-run average variable and marginal cost curves? Let K be fixed in the short run. The firm's short-run average variable cost curve, AVC, as a function of K and q is AVC=$ (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcute. E.g., a superscript can be created with the character.) Write AVC and MC functions
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Month (m): 4 Day (d): 1 Use the two numbers above, m and d, to complete the cost function for a perfectly competitive firm: Cost (q) = m q2 + d = (30) For a cost function like yours, Marginal Cost (MC) = 2 m q . Specifically, what are the following for the cost function you wrote out above? Fixed Cost = Average Total Cost = Cost (q)/q = Variable Cost = Average Fixed Cost = FC/q = Marginal Cost = 2 m q = Average Variable Cost = VC/q = (15) Fill in the table with your values from your cost function. q Total Cost AVC AFC ATC MC 0 0 0 -- -- -- 1 2 3 4 5 6
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