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Consider the output quantity vector below. It relates to quantity produced per plant, per day: Q 0 1 2 3 4 5 6 7 8
Consider the output quantity vector below. It relates to quantity produced per plant, per day:
Q |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
Consider a cubic total cost function (estimated using historical production data):
TC(Q)=5+0.32*Q-0.25*Q2+0.38*Q3
Compute the average and marginal cost starting from Q=1 up to Q=15. The absolute value of the difference between average and marginal cost is minimized when _____ units are produced.
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