Let AC(q) and MC(q) be the average cost function and the marginal cost function respectively. (a) Show that if AC(q) has a critical point at q = q*, then MC(q*) AC(q*). (b) Use the second derivative test to write down the conditions (in terms of MC(q)) for the average cost function AC(q) being minimized at q = q*.

Let AC(q) and MC(q) be the average cost function and the marginal cost function respectively. (a) Show that if AC(q) has a critical point at q = q, then MC(q) AC(q). (b) Use the second derivative test to write down the conditions (in terms of MC(q)) for the average cost function AC(q) being minimized at q = q.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 17SQ

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