Question
1.Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market: TC=180Q - 8Q 2
1.Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market:
TC=180Q - 8Q2 + 0.5Q3
You also estimate the following demand curve for the output you are producing.
P=360 - 8Q
a.Derive the equations for average cost and marginal cost curves.
b.Over what range of output does economies of scale exist? Diseconomies of scale?
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Quantitative Methods for Business
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
13th edition
1285866312, 978-0357685648, 978-1285866314
