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(Costs) Suppose a firm operates according to the following total cost function: TC(Q)=1000+5Q+10Q2 where Q is the quantity of output, TC(Q) is the total cost

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(Costs) Suppose a firm operates according to the following total cost function: TC(Q)=1000+5Q+10Q2 where Q is the quantity of output, TC(Q) is the total cost of producing Q units. a. Is this a short run or long run production function? Explain. b. How much is the fixed cost? c. What is the variable cost function? d. What is the average total cost function? e. What is the average fixed cost function? f. What is the average variable cost function? g. The marginal cost function is MC(Q)=5+20Q, how much should the firm be producing such that the average variable cost is minimized? (hint: what will happen when MC(Q) =AVC(Q)?) Now, the production function is changed to: TC(Q)=4Q+20Q2 h. Is this a short run or long run production function? Explain. i. Determine the average total cost function. j. Determine the Minimum efficient scale level of output. k. At what level of output will the firm enjoy: 1. Economies of scale? 2. Constant returns to scale? 3. Diseconomies of scale

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