Question
Consider the following total cost data where cost is measured in dollars and output is measured in thousands of units: Estimate a cubic total cost
Consider the following total cost data where cost is measured in dollars and output is measured in thousands of units:
Estimate a cubic total cost curve of the form:
=+1+22+33+TCi=o+1Qi+2Qi2+3Q3+i
The marginal cost curve is the first derivative of the total cost curve and is
=1+22+332MCi=1+22Qi+33Qi2
Using your parameter estimates, what is the estimated quantity that would minimize marginal cost?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Macroeconomics Principles Applications and Tools
Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez
9th edition
978-0134089027, 134089022, 978-0134420684
