Q. 5 a) Suppose that the total cost function of a firm is given as TC = 20 +Q² Determine the output level that minimizes average total cost (ATC). At this output level, what is TC, ATC, and MC? Verify that at this output level MC = ATC, and that ATC intersects MC from below. b) A firm has a fixed production cost of $5000 and a constant marginal cost of production of $500 per unit produced. What is the firm's total cost function? Average cost?
Q. 5 a) Suppose that the total cost function of a firm is given as TC = 20 +Q² Determine the output level that minimizes average total cost (ATC). At this output level, what is TC, ATC, and MC? Verify that at this output level MC = ATC, and that ATC intersects MC from below. b) A firm has a fixed production cost of $5000 and a constant marginal cost of production of $500 per unit produced. What is the firm's total cost function? Average cost?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Solution part A and B
![Q. 5 a) Suppose that the total cost function of a firm is given as
TC = 20 +Q²
Determine the output level that minimizes average total cost (ATC).
At this output level, what is TC, ATC, and MC?
Verify that at this output level MC = ATC, and that ATC intersects MC from below.
b) A firm has a fixed production cost of $5000 and a constant marginal cost of production of
$500 per unit produced. What is the firm's total cost function? Average cost?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a60af14-570b-46e1-b857-6475c5d7e979%2Fc901552f-8c3f-49ec-bbb3-8a28d8bd10aa%2Fuaitga_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q. 5 a) Suppose that the total cost function of a firm is given as
TC = 20 +Q²
Determine the output level that minimizes average total cost (ATC).
At this output level, what is TC, ATC, and MC?
Verify that at this output level MC = ATC, and that ATC intersects MC from below.
b) A firm has a fixed production cost of $5000 and a constant marginal cost of production of
$500 per unit produced. What is the firm's total cost function? Average cost?
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