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1 Mar 2019
A typical firm in Industry X has the following total cost and marginal cost functions:
TC(q) = q2+210+30q
MC(q) = 2q+30 where q represents the units of output.
a) What is the fixed cost of a typical firm in this industry when it producers 20 units of output.
b) What is the variable cost of a typical firm in this industry when it produces 20 units of output.
c) What is the equation for average total cost (ATC)?
d) What is average total cost when the firm produces 40 units of output?
e) ATC reaches its minimum value at how many units of output?
f) Are there economies of scale at 10 units of output? Explain your reasoning.
A typical firm in Industry X has the following total cost and marginal cost functions:
TC(q) = q2+210+30q
MC(q) = 2q+30 where q represents the units of output.
a) What is the fixed cost of a typical firm in this industry when it producers 20 units of output.
b) What is the variable cost of a typical firm in this industry when it produces 20 units of output.
c) What is the equation for average total cost (ATC)?
d) What is average total cost when the firm produces 40 units of output?
e) ATC reaches its minimum value at how many units of output?
f) Are there economies of scale at 10 units of output? Explain your reasoning.
Bunny GreenfelderLv2
1 Mar 2019
