Problem 1. Tanner owns a car dealership and sells used cars. Tanner buys a used car at price $p and has no other costs.

(a) What is Tanner's total cost if he sells 10 cars?

(b) What is Tanner's total cost if he sells 20 cars?

(c) What is Tanner's total cost if he sells y cars, TC(y)?

(d) What is Tanner's average cost function, AC(y)?

(e) For every additional car Tanner sells, by how much do his costs increase?

(f) What is Tanner's marginal cost function, MC(y)?

(g) Draw Tanner's average and marginal costs curves if p=20.

(h) Suppose Tanner has to pay $b for a radio commercial. What is Tanner's new total cost, TC(y)?

(i) What is Tanner's new average cost, AC(y)?

(j) What is Tanner's new marginal cost, MC(y)?

(k) If the cost of the radio commercial is b=100 and p=20, draw Tanner's average cost

function of the previous graph.