### Short Run Total Cost FunctionGiven below is the short run total cost function:\[ TC = 50 + 100Q - 4Q^2 + 2Q^3 \]**Tasks:**1. **Calculate TFC, AVC, AC, and MC** when the firm produces 5 units of output. 2. **Calculate the level of output at which AVC is minimum.**### Explanation of Terms:- **TFC (Total Fixed Cost):** The cost that does not change with the level of output.- **AVC (Average Variable Cost):** The variable cost per unit of output.- **AC (Average Cost):** The total cost per unit of output.- **MC (Marginal Cost):** The cost of producing one more unit of output.### Steps to Solve:1. **Substitute $ Q = 5 $ into the total cost function to find TC.**2. **Calculate TFC by identifying constant terms (independent of Q) in the total cost function.**3. **Determine AVC, AC, and MC using the cost functions derived for TC.**4. **Find the output level that minimizes AVC by setting the derivative of AVC with respect to Q to zero and solving for Q.**Use these steps to analyze cost behaviors and production efficiency.**Note:** Understanding cost functions is crucial in economics to predict how costs change with different levels of production and to make informed decisions.

Total cost is the sum total of cost including the variable and fixed cost, average cost is the, cost…

Given below is the short run total cost function: (2+1=3) TC = 50 + 100Q-4Q2 + 2Q3 Calculate TFC, AVC, AC and MC when the firm produces 5 units of output. Calculate the level of output at which AVC is minimum.

Given below is the short run total cost function: (2+1=3) TC = 50 + 100Q-4Q2 + 2Q3 Calculate TFC, AVC, AC and MC when the firm produces 5 units of output. Calculate the level of output at which AVC is minimum.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: If the firm hires 5 employee, total fixed costs equals

A: Total fixed cost is the cost which is even exits when output is zero. So at zero output we have the…

Q: For the cost function C(x) 125x + 375 x+7 where C is in dollars and x is the number produced in…

Q: Assume that the situation can be expressed as a linear cost function. Find the cost function.…

A: The total cost function comprises of variable costs and fixed costs. The fixed costs remain the same…

Q: Find total fixed cost if average fixed cost is $30 and output is 11

A: The information being given is:- Average fixed cost = $30 Output = 11 units We have to calculate…

Q: The following cost data are for a firm in the short run: Output Total Cost 0 $400 1 500 2 550 3 600…

A: Given,

Q: A firm’s estimated long-run total cost function is LRTC = 160Q - .6Q2 + .002Q3. Suppose the firm is…

A: Cost elasticity refers to the responsiveness of cost with respect to the change in output level . It…

Q: The total cost of producing one unit is $100 The total cost of producing two units is $150 At a…

A: It is given that, the total cost of production of 1st unit = $100. The total cost of production when…

Q: Calculate Marginal cost when total cost rises from $30 to $70 and the output rises 2 to 3 units

A: We are given that the total cost has increased from $30 to $70 TC1 = $30 TC2 = $70 Output has also…

Q: For a production function at a given level of output in the short run, the marginal product of labor…

A: Marginal product of labor refers to the extra unit of output produced when an additional unit of…

Q: If short run total costs are 2q2 + 50q + 50, and output is 15, average variable costs will be 80.…

A: Given; Total cost; TC=2q2+50q+50 Formula to calculate average variable cost:-…

Q: Suppose the cost function for a firm is given by C(q) = 200 + 5q. Then: 1. Find fixed cost 2. find…

A: Cost of production occurs while producing goods and services in the economy. The production of these…

Q: is given ost for producing 15 units of outpu" s 3000 and for 16 units is 3,500 "ind the value of…

Q: Marsha made an extensive study into the cost function of the dining halls on the A&M campus. She…

A: Marginal cost is the additional cost incurred when one more unit of output is produced. It is the…

Q: As a production process requires labor L and capital K, q = F (L, K). The wage for a labor is $500,…

A: The optimal level of labor and capital is given by the point where the marginal rate of technical…

Q: Cost is in dollars and x is the number of units. Find the marginal cost function. MC for the given…

A: Given data: Cx=700+5x+0.04x2

Q: The average cost function of a firm is:- 2Q² - 350 Find the total cost function

A: The data presented in the question above is:- We are given with the average cost function of a firm…

Q: When the marginal product of labor diminishes average fixed cost rises average variable cost is…

A: Marginal product of labor is the additional output produced by employing an additional unit of…

Q: If average cost for Ruby's chocolate production firm is $23 and the output is 1000 units.…

A: The data being presented in the question is:- Average cost for ruby's firm = $23 Output = 1000…

Q: firm X has a total cost of 100 and a total variable cost of 80, what is its total fixed cost? a)…

A: Fixed cost is independent of output produced.

Q: (a) Find the number of hours for which each cost function will give the same cost. hours (b) !f the…

A: Fron the provided data, Acme (x); 140+10x Bell (x);200+4x

Q: For a short-run cost function which of the following statements is (are) not true?

A: The marginal cost function intersects the average variable cost function where the average variable…

Q: Diseconomies of scale exists over the range of output for which the long run average cost curve is?

A: Diseconomies of scale exists over the range of output for which the long run average cost curve is…

Q: Find fixed cost if output is 20 units and AFC is $21

A: Given information, Total output= 20 units Average fixed cost (AFC)= $21 To find: fixed cost

Q: Consider the total cost function, TC = 25 + 6Q - 5Q^2 + 6Q^3 Find the marginal cost if firm want to…

A: Marginal cost is nothing but the cost incurred to the firm when they want to produce additional unit…

Q: When the quantity of a variable input is increased from 4 to 6 units, the total output increases…

Q: The total cost function of a firm is:- 23Q? - 13Q + 40 Find the average cost function

Q: A company's marginal cost function is MC(x) (given below), where x is the number of units. Find the…

A: In Economics, marginal cost is the change in the total cost that arises when the quantity produced…

Q: None

A: We find the total cost function C(q) from the marginal cost function C'(q). For this, we need to…

Q: If variable costs for a firm is $660, the average total cost is $8, and the firm sells 120 units,…

A: Variable cost as the name suggests changes with respect to the output produced. For example- the…

Q: The following cost data are for a firm in the short run: Output Total Cost 0 $400 1 500 2 550 3 600…

A: The firms in the market tend to estimate their fixed costs, variable costs, total costs, revenue,…

Q: If cost is measured along the vertical axis and output on the horizontal axis, total fixed cost is…

A: Total Fixed Cost (TFC) refers to the sum of all costs that do not change with the level of output…

Q: Fill in the missing data using the cost calculations for short run costs

A: Calculate TVC by subtracting TFC from TC. TVC=TC-TFC Calculate MC by subtracting TCn from TC n-1.…

Q: A bag factory produces 30 units of output. Its average fixed cost (AFC) = $32, average total cost…

A: The objective of the question is to calculate the total variable cost (TVC) of the bag factory given…

Q: The cost function of a firm is given as C1 = 400 + 200 + 4Q" using this cost function what is the…

A: here we calculate the efficient scale of the firm by using the cost function so the calculation of…

Q: A firm estimates its production function as Q = -2.4 + 20*L -.5*L2 + 30*K -1.00*K2 + 15*F -.3*F2.…

A: Given, The production function, Q = -2.4+ 20 L - 0.5L2+30K - 1.00K2+15F- 0.3F2 The total cost…

Question

### Short Run Total Cost Function

Given below is the short run total cost function:

\[ TC = 50 + 100Q - 4Q^2 + 2Q^3 \]

**Tasks:**

1. **Calculate TFC, AVC, AC, and MC** when the firm produces 5 units of output.

2. **Calculate the level of output at which AVC is minimum.**

### Explanation of Terms:

- **TFC (Total Fixed Cost):** The cost that does not change with the level of output.
- **AVC (Average Variable Cost):** The variable cost per unit of output.
- **AC (Average Cost):** The total cost per unit of output.
- **MC (Marginal Cost):** The cost of producing one more unit of output.

### Steps to Solve:

1. **Substitute $ Q = 5 $ into the total cost function to find TC.**
2. **Calculate TFC by identifying constant terms (independent of Q) in the total cost function.**
3. **Determine AVC, AC, and MC using the cost functions derived for TC.**
4. **Find the output level that minimizes AVC by setting the derivative of AVC with respect to Q to zero and solving for Q.**

Use these steps to analyze cost behaviors and production efficiency.

**Note:** Understanding cost functions is crucial in economics to predict how costs change with different levels of production and to make informed decisions.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the relationship between average variable cost and marginal cost? a) They are always equal b) Marginal cost is always higher than average variable cost c) Marginal cost is always lower than average variable cost d) The relationship varies depending on the production level
The following cost data are for a firm in the short run: Output Total Cost 0 $400 1 500 2 550 3 600 4 650 5 700 What is the firm's average variable cost at an output of 5 units? $30 $60 $120 $140
Diminishing returns A cost function of the form C(x) = 1/2 x2reflects diminishing returns to scale. Find and graph the cost,average cost, and marginal cost functions. Interpret the graphs andexplain the idea of diminishing returns.
If the total fixed costs of manufacturing 100 fans is $7500. Calculate the average fixed costs.
Please do it correctly!! I can't afford another wrong answ
Give typing answer with explanation and conclusion
None
The total cost function of firm is TC = 60 + 6q. If the firm produce 10 units per day then calculate total cost of production.
Previous answer was poorly formated
Calculate Marginal cost if total cost changes from 80 to 160 and output rises from 1 to 3
The table below provides the total variable cost for a firm. Total Quantity of Output Variable Cost 0 SO 1 $50 $60 3 $75 4 $100 If the fixed cost is $60, what is the average total cost of the 3rd unit? $45 $25 $35 $135 $75
a) Calculate the marginal product (MP1) for the mixers. Does the production function have increasing, decreasing, constant marginal product for the mixers? b) Suppose in the short run the amount of machines she has is fixed at 27. How many mixers should she use? How many baklavas will she produce? How much profit will she make? c)Usinag an isoprofit, as well as the production function, draw a diagram of your soltuion from part (b). carefully label all the slopes and intercepts. d) In the long run, how many mixers should she use? How many machines? How many baklavas will she make? e) Suppose that the government decides to provide a $1 subsidy per mixer. What is the profit-maximizing amount of input to use now?