An economist estimated that the cost function of a single-product firm is: C( Q

Question

An economist estimated that the cost function of a single-product firm is:

C(Q) = 60 + 30Q + 25Q2 + 5Q3.

Based on this information, determine the following:

a. The fixed cost of producing 10 units of output.

$

b. The variable cost of producing 10 units of output.

$

c. The total cost of producing 10 units of output.

$

d. The average fixed cost of producing 10 units of output.

$

e. The average variable cost of producing 10 units of output.

$

f. The average total cost of producing 10 units of output.

$

g. The marginal cost when Q = 10.

$

References

eBook & Resources

Explanation / Answer

a. fixed cost =60 for 10 units or any units as it is constant cost

b. The variable cost of producing 10 units of output = 30*10+25*10^2+5*10^3=7800

c. The total cost of producing 10 units of output.=60+ 30*10+25*10^2+5*10^3=7860

d. The average fixed cost of producing 10 units of output.=60/10=6

e. . The average variable cost of producing 10 units of output.=7800/10=780

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.