Answer the following questions, show work if possible. If the total cost functio

Question

Answer the following questions, show work if possible.

If the total cost function for a firm is TC = 2q2 + 30q, what is the marginal cost?
a. 4q + 30q                                         b. 4q + 30
c. 2q*2q + 30                                      d. 2q + 30

If the total cost function for a firm is TC = 2q2 + 30q, what is the average cost?
a. 4q + 30                                            b. 2q + 30q
c. 2q + 30                                            d. 4q^2 + 60q

If the marginal cost is greater than the average cost, the average cost must be:
a. rising                                               b. falling
c. staying the same                             d. indeterminate (we cannot know)


Use the graph below to answer the next two questions:

Explanation / Answer

1.

TC = 2q2 + 30q

Marginal Cost MC (q) = dTC(q)/ dq = 4q +30

Hence option (b) is correct.

2.

TC = 2q2 + 30q

Average cost AVC(q) = TC(q)/q = (2q2 + 30q)/ q = 2q +30

Hence, option (c) is correct.

3

If marginal cost is greater than average

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