Suppose the same firms cost function is C (q) = 4q2 + 16. a) Find variable cost,
Question:
a) Find variable cost, fixed cost, average cost, average variable cost, and average fixed cost. (Marginal cost is given by MC = 8q.)
b) Show the average cost, marginal cost, and average variable cost curves on a graph.
c) Find the output that minimizes average cost.
d) At what range of prices will the firm produce a positive output?
e) At what range of prices will the firm earn a negative profit?
f) At what range of prices will the firm earn a positive profit?
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Step by Step Answer:
a Variable cost is that part of total cost that depends on q so VC 4q 2 and fixed cost is that part ...View the full answer
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