Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form AVC = a + bQ + cQ2 and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000. DEPENDENT VARIABLE: AVC R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 35 0.8713 108.3 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 43.40 13.80 3.14 0.0036 Q −2.80 0.90 −3.11 0.0039 Q2 0.20 0.05 4.00 0.0004 If Straker Industries produces 12 units of output, what is estimated short-run marginal cost (SMC)? a. $28.04 b. $62.60 c. $32.40 d. $33.33

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