Answer to Question #154857 in Economics of Enterprise for Muhammad Ammar Khan

Question #154857

1.    Given the following cost function: TC = 1500 + 15Q – 6Q 2 + Q3            2 marks         

a.    Determine the total fixed cost for producing 1000 units of output and 500 units of output.

b.    What is AFC at:

                                                            i.     1000 units of output b)

                                                          ii.     500 units of output iii.

c.     Determine TVC, AVC, MC and AC at 50 units of output.



1
Expert's answer
2021-01-13T13:44:33-0500

a). Total fixed cost

at Q=1000

FC = 1500

at Q=500

FC = 1500

b). AFC "= \\frac{FC}{Q}"

i. at Q = 1000

"AFC = \\frac{1500}{1000} = 1.5"

ii. at Q = 500

"AFC = \\frac{1500}{500}=3"

c). TVC = TC – FC = 15Q – 6Q2 + Q3

"AVC = \\frac{TVC}{Q} = 15 - 6Q + Q^2 \\\\\n\nAC = \\frac{TC}{Q} = \\frac{1500}{Q}+15-6Q+Q^2 \\\\\n\nMC = \\frac{dTC}{dQ}=15-12Q+3Q^2"

at Q = 50

"TVC = 15(50) -6(50)^2 + (50)^3 \\\\\n\n= 750 -15000 + 125000 \\\\\n\n= 110750 \\\\\n\nAVC = \\frac{TVC}{Q} \\\\\n\n\\frac{110750}{50}=2215 \\\\\n\nAC = \\frac{1500}{50}+15 - 6(50)+50^2 \\\\\n\n= 2245 \\\\\n\nMC = 15 -12(50) + 3(50)^2 \\\\\n\n= 6915 \\\\\n\nTVC = 110750 \\\\\n\nAVC = 2215 \\\\\n\nMC = 6915 \\\\\n\nAC = 2245"

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Comments

ARNAB
15.12.21, 07:11

I have seen it ,it's very good

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