Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![**Total Cost Function Analysis**
The total cost (TC) function is given by the equation:
\[ TC = 188 + 38Q + 4Q^2 \]
**Problem Statement:**
Determine the average fixed cost when 18 units are produced. Use the following steps and calculations, and round your answer to two decimal places.
**Steps to Solve:**
1. **Identify the Fixed Cost:**
- In the function \( TC = 188 + 38Q + 4Q^2 \), the fixed cost is the constant term, which is 188.
2. **Calculate the Average Fixed Cost for 18 Units:**
- Use the formula for average fixed cost (AFC):
\[ AFC = \frac{\text{Total Fixed Cost}}{\text{Quantity}} \]
- Substitute 188 for the total fixed cost and 18 for the quantity:
\[ AFC = \frac{188}{18} \]
3. **Perform the Division:**
\[ AFC = 10.44 \] (rounded to two decimal places)
**Conclusion:**
The average fixed cost when 18 units are produced is **10.44**.
**Note:** There are no graphs or diagrams included in this explanation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa6b0f77-8002-40a4-95e9-5d795208385d%2Fc9d25cea-491d-43f7-ac65-23d9210606c2%2F9zdo1gpp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Total Cost Function Analysis**
The total cost (TC) function is given by the equation:
\[ TC = 188 + 38Q + 4Q^2 \]
**Problem Statement:**
Determine the average fixed cost when 18 units are produced. Use the following steps and calculations, and round your answer to two decimal places.
**Steps to Solve:**
1. **Identify the Fixed Cost:**
- In the function \( TC = 188 + 38Q + 4Q^2 \), the fixed cost is the constant term, which is 188.
2. **Calculate the Average Fixed Cost for 18 Units:**
- Use the formula for average fixed cost (AFC):
\[ AFC = \frac{\text{Total Fixed Cost}}{\text{Quantity}} \]
- Substitute 188 for the total fixed cost and 18 for the quantity:
\[ AFC = \frac{188}{18} \]
3. **Perform the Division:**
\[ AFC = 10.44 \] (rounded to two decimal places)
**Conclusion:**
The average fixed cost when 18 units are produced is **10.44**.
**Note:** There are no graphs or diagrams included in this explanation.
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