Question
A competitive firm estimates its average variable cost function to be AVC= 125-0.21Q+0.0007Q 2 . The firm's total fixed cost is $3,500. 1) What is
A competitive firm estimates its average variable cost function to be AVC= 125-0.21Q+0.0007Q2.
The firm's total fixed cost is $3,500.
1) What is the marginal cost function associated with this average variable cost function
SMC =__________________________ ?
2) AVC reaches its minimum at ______units of output. Minimum AVC is $_________.
3) Suppose the price of the product is P = $125. The firm should produce _________ units of output. The firm earns a profit (loss) of $__________________.
4) Suppose the price of the product is P = $115. The firm should now produce _________ units of output. Its profit (loss) will be $_________.
5) Suppose the price of the product falls to P = $100.The firm should produce _________ units of output. Its profit (loss) will be $____________.
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Accounting General Journal
Authors: Claudia Gilbertson
11th Edition
1337623121, 9781337623124
