(b) Formidable Manufacturing Company has the following cost functions in the short run, where production level, Q is measured in '000s of units: TC = 0.5Q³ – 2Q² + 5Q FC = 7 (i) Calculate the optimum output level for this company in the short run (ii) Calculate the marginal cost for this company at a production level of 2,500 units. (iii) The industry for in which Formidable Manufacturing Company operates classifies its members by the following output: Size Micro Small Medium Large Output (Q): 0-1000 1000-3000 3000-6000 >6000 In the long run, the AVC for this industry is given by: AVC = 0.4Q² – 3Q + 15. Determine the optimum plant size for this industry.

(b) Formidable Manufacturing Company has the following cost functions in the short run, where production level, Q is measured in '000s of units: TC = 0.5Q³ – 2Q² + 5Q FC = 7 (i) Calculate the optimum output level for this company in the short run (ii) Calculate the marginal cost for this company at a production level of 2,500 units. (iii) The industry for in which Formidable Manufacturing Company operates classifies its members by the following output: Size Micro Small Medium Large Output (Q): 0-1000 1000-3000 3000-6000 >6000 In the long run, the AVC for this industry is given by: AVC = 0.4Q² – 3Q + 15. Determine the optimum plant size for this industry.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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