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Tatal Cost AVC AFC ATC MC 25 5. 20 10 40 10 10 20 65 15 6.67 21.67 30 100 20 25 40 145 4 29 50 25 20 25

Tatal Cost AVC AFC ATC MC 25 5. 20 10 40 10 10 20 65 15 6.67 21.67 30 100 20 25 40 145 4 29 50 25 20 25

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Tatal Cost AVC AFC ATC MC 25 5. 20 25 10 40 10 10 20 20 65 15 6.67 21.67 30 100 25 40 145 4 29 50 5 20 25 5,
Transcribed Image Text:Tatal Cost AVC AFC ATC MC 25 5. 20 25 10 40 10 10 20 20 65 15 6.67 21.67 30 100 25 40 145 4 29 50 5 20 25 5,
For any cost function, you can find min ATC by seting ATC = and solving for q. Create a graph showing the minimum of your ATC function. Add AVC and MC to your graph. Here MC is always increasing. As q increases, what happens to ATC when it is less than MC and what happens to ATC with is more than MC? At what level of production is AVC at its minimum? (the table you made is enough information for you to find this value.) For any price, will your firm always be able to cover its variable cost? On your graph, indicate the supply curve of your firm in the short run.
Transcribed Image Text:For any cost function, you can find min ATC by seting ATC = and solving for q. Create a graph showing the minimum of your ATC function. Add AVC and MC to your graph. Here MC is always increasing. As q increases, what happens to ATC when it is less than MC and what happens to ATC with is more than MC? At what level of production is AVC at its minimum? (the table you made is enough information for you to find this value.) For any price, will your firm always be able to cover its variable cost? On your graph, indicate the supply curve of your firm in the short run.
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