Highlighted question. Thank you. = 5Q=187.5=> Q = 187.5/5 = 37.5And at this quantity,Price 187.5 (2.5 × 37.5)= 93.75The quantity at which the TR is maximum = 37.5 The price at which the TR is maximumis 93.75Problem 2:Your company's cost function (monthly) can be defined as; TC = cost per unit (AC) × quantitysupplied (Q). If the cost per unit (average cost) for your firm is AC = (800/Q) - 10 +2Q:a. What is the total cost function for your firm in terms of Q?AC(Q)=800/Q-10+2QWhen average cost function is given, total cost can be calculated as average cost multiplied byquantity.TC(Q)=AC(Q)XQTC(Q)=(800/Q−10+2Q)×QTC(Q)=2Q2-10Q+800Total cost function in terms of Q. Total cost function in terms of Q.b. How would you interpret the intercept term in this function?TC(Q)=2Q2-10Q+800The intercept which is 800 is the Total fixed cost the firm faces and the rest of the costs are thefirms total variable costsThen the firms total fixed cost are and firms total variable cost areTVC(Q)=2Q2-10QTotal cost can be written as the sum of total fixed cost and total variable costTC(Q)=TFC+TVC(Q)The intercept term can be interpreted as Total fixed cost of the firm.C. What is the marginal cost function for your firm? TC(Q)=2Q2-10Q+800Marginal cost of the firm can be derived by differentiation of the total cost function withrespect to QMC(Q)=dTC(Q)/dQ=d(2Q2-10Q+800)/dQ=4Q-10Thus marginal cost function for the firm is given asMC(Q)=4Q-10d. At what level of output (Q) is AC minimized?e. Is MC always less than AC?Given AC =and TCSo,OT,or,or,OT,MCor,800QAC x Q= {(800) - 10+2Q} Q800 - 10Q +2Q²8TC8QNow, the minimum of AC occurs at that level of Q where ACƏQAccordingly,{(800) 10 + 2Q- 2Q }800+2-=8TCƏQ= -10 + 4Q-800800800Q²(800 – 10Q + 2Q² )8AC8Q+2=02 02Q²Q²= 210+2Q800= 400= 20JAC8Q0MC is NOT ALWAYS lesser than the AC. When AC is falling then MC happens to be greaterthan AC, while, on the other hand, when AC is rising, MC is less than that of AC. At theminimum point of AC, both MC and AC are equal. In this case, MC will be lesser than AConly for output less than 20. Thereafter, the MC will be greater than AC. Thus, MC is lessthan AC only till the minimum of AC is reached. Beyond that MC is more than AC.3

Given information: Average cost function: AC = (800 / Q) - 10 + 2Q and Marginal cost function: MC =…

Answered: d. At what level of output (Q) is AC…

d. At what level of output (Q) is AC minimized?

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

Similar questions

Hi can you help me? I can't find anything on the net. List down john Stuart Mill significant events and dates or timeline. No need to explain one by one. Just the dates and the title. Thank you
Fill in the blanks
Types of consumer goods
I cannot understand anything written on this paper, would you please be able to type it?
Legal and Ethical Behavior in the Philippines
You have decided to open a small business in Country Y and you want to hire some employees for your business. Discuss in detail about the rationing device you will use when hiring employees. Please read step by step and answer Thank you.
please answer letter h. thanks!
ramifications /effects for Employees moving from the UK to Germany?
Do you know who are Millennials or Generation Y? Search and read about this generation. Also find out about Generation Z. Are you aware of the career stages that employees pass through? Do you know what career stage you will be in when you start your first job? Do you know what your main concerns will be in that stage?
Your printed name and hand- written signature O Beginning O Closing O Middle
This ended up being wrong. Can you please re-do? Thanks
A person who shows alertness towards profit opportunities.