Question
Assume that a firm has the following costs (q = output, TC = total costs, MC = marginal costs): TC = $400 if q =
Assume that a firm has the following costs (q = output, TC = total costs, MC = marginal costs):
TC = $400 if q = 0
TC = 2q2 + 20q + 600 if q > 0
MC = 4q + 20 if q > 0
Based on the equations above, please calculate the various types of cost below. Remember, express your answer in terms of dollars, not dollars and cents.
a. Assume this firm operates under profit maximizing principlesand thatthe market price is currently $100. If so, the firm's average cost (AC)would be
b. Assume this firm operates under profit maximizing principlesand thatthe market price is currently $100. If so, the firm's average variable cost (AVC)would be
c. Assume this firm operates under profit maximizing principles and that the firm is producing20 units of output.Theirprofit from producing those20 units would be
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Financial Reporting and Analysis Using Financial Accounting Information
Authors: Charles H. Gibson
13th edition
1285401603, 1133188796, 9781285401607, 978-1133188797
