Question
The Big Horn Corporation commissioned an Economic consultant to estimate the company's cost Function. The consultant collected a large amount of data for a number
The Big Horn Corporation commissioned an Economic consultant to estimate the company's cost Function. The consultant collected a large amount of data for a number of years from the books of the corporation and came up with the following equation:
TC = 519+ 22Q +1.5Q2
Where, TC= Total cost (in thousands)
Q= Quantity produced per period
a. Plot this curve for quantities 1 through 15
b. Calculate the average total cost, average variable cost, and marginal cost, and plot them on another graph
c. Discuss your results in terms of decreasing, constant, increasing marginal costs. Does Big Horn's cost function illustrate all these?
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Macroeconomics Principles and Applications
Authors: Robert e. hall, marc Lieberman
5th edition
1111397465, 9781439038970, 1439038988, 978-1111397463, 143903897X, 9781439038987, 978-1133265238
