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Intel's average cost in a given year falls with the quantity that it produces. In addition, extra production this year lowers the average cost curve
Intel's average cost in a given year falls with the quantity that it produces. In addition, extra production this year lowers the average cost curve next year. For example, in year 1, AC =60 if quantity is 20 and AC = 36 if quantity is 60. If Intel produces 20 in year 1 and 40 in year 2, the average cost in year 2 will be 36. However, for every extra 10 units it produces in year 1, its AC for any given quantity in year 2 falls by 5%. What is the total cost and the average cost over the two years combined if the firm produces 20 in year 1 and 40 in year 2? The total cost (C) is C = $ 2640 . (Enter your response rounded to two decimal places.) The average cost (AC) is AC = $ (Enter your response rounded to two decimal places.)
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