Suppose a firm faces a cost function of C = 8 + 4q + q^2, so that its marginal cost is MC=4 + 2q. a) What is the firm's fixed cost. F? b) What is the formula for the firm's variable cost (VC), Average Cost (AC), and Average Variable Cost (AVC)? c) On a diagram, draw the AC, AVC, and MC curves.
Suppose a firm faces a cost function of C = 8 + 4q + q^2, so that its marginal cost is MC=4 + 2q. a) What is the firm's fixed cost. F? b) What is the formula for the firm's variable cost (VC), Average Cost (AC), and Average Variable Cost (AVC)? c) On a diagram, draw the AC, AVC, and MC curves.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section12.3: The Various Measures Of Cost
Problem 3QQ
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Suppose a firm faces a cost function of C = 8 + 4q + q^2, so that its marginal cost is
MC=4 + 2q.
a) What is the firm's fixed cost. F?
b) What is the formula for the firm's variable cost (VC), Average Cost (AC), and Average Variable Cost (AVC)?
c) On a diagram, draw the AC, AVC, and MC curves.
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