A firm’s short-run cost function is C(q) = 100q - 5q2 + 0.3q3 + 400. a) Determine the fixed cost, F; the variable Cost, VC b) The average fixed cost AFC, the average variable cost, AVC; the average total cost, AC c) the marginal cost, MC

A firm’s short-run cost function is C(q) = 100q - 5q2 + 0.3q3 + 400. a) Determine the fixed cost, F; the variable Cost, VC b) The average fixed cost AFC, the average variable cost, AVC; the average total cost, AC c) the marginal cost, MC

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 11MC

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Concept explainers

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.

Question

Q4) A firm’s short-run cost function is C(q) = 100q - 5q2 + 0.3q3 + 400. a) Determine the fixed cost, F; the variable Cost, VC b) The average fixed cost AFC, the average variable cost, AVC; the average total cost, AC c) the marginal cost, MC d) If q= 10 find FC,VC, AFC, AVC, ATC and MC

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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