Given the following cost functions:TC=100+60Q-3Q2+0.1Q3TC=100+ 60Q+3Q2TC=100 + 60QCompute the average variable cost, average cost, and marginal cost for each function. Plot them on a graph.In each case, indicate the point at which diminishing returns occurs. Also, indicate the point of maximum cost efficiency (i.e., the point of minimum average cost).What is the relationship between marginal cost and average variable cost and between marginal cost and average cost? What is the relationship between average variable cost and average cost?

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Answered: Given the following cost functions:…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given the following cost functions:

TC=100+60Q-3Q²+0.1Q³

TC=100+ 60Q+3Q²

TC=100 + 60Q

Compute the average variable cost, average cost, and marginal cost for each function. Plot them on a graph.
In each case, indicate the point at which diminishing returns occurs. Also, indicate the point of maximum cost efficiency (i.e., the point of minimum average cost).
What is the relationship between marginal cost and average variable cost and between marginal cost and average cost? What is the relationship between average variable cost and average cost?

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