1. The firm\'s short-run total cost function is C(Q)-70+4Q+2Q2 where Q is the am
ID: 1153938 • Letter: 1
Question
1. The firm's short-run total cost function is C(Q)-70+4Q+2Q2 where Q is the amount of output. The corresponding unit cost functions are: A. AFC-70 AVC-4Q+2Q MC-4Q B. AFC-70 AVC 4+2Q MC 4+4Q C. AFC-70/Q AVC-4+2Q; MC-4+4Q D. AFC 70/ AVC-4+2Q; MC 4+2Q 2. The firm's short-run total cost function is C(Q)-50+6Q, where Q is the amount of output. The corresponding unit cost functions are A. AFC 50 AVC-50+6Q: MC 6Q B. AFC-50/Q AVC-6; C. AFC-50/Q AVC-6Q D. AFC 50/: AVC-6; MC-6 MC-6 MC-6Q 3. Which of the following is true? A. ATC AVC-AFC B. AVC-ATC-AFC C. AFC-ATC+AVC D. ATC-AFC+MCExplanation / Answer
1) C = 70 + 4Q + 2Q2
C = Fixed Cost + Variable Cost,
FC = 70 and VC = 4Q + 2Q2
AFC = FC / Q = 70 / Q and AVC = VC / Q = 4 + 2Q
MC = dC/dQ = 4 + 4Q
C) AFC = 70 / Q, AVC = 4 + 2Q, MC = 4 + 4Q
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2) C = 50 + 6Q,
AFC = 50 / Q, AVC = 6 , MC = 6
B) AFC = 50 / Q, AVC = 6 , MC = 6
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3) Total Cost(TC) = Fixed cost(FC) + Variable Cost(VC)
TC/Q = (FC/Q) + (VC/Q)
Average total cost (ATC) = Average Fixed cost(AFC) + Average Variable Cost (AVC)
AVC = ATC - AFC
B) AVC = ATC - AFC
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