Question

Give the formulas for and plot AFC,MC,AVC and AC if the cost function is: A. c=10+10Q, B. C=10+q2, C. C=10+10q-4q²+q3.

Answer 1

Solution:

A.). C = 10 + 10Q

AFC = $\frac{TFC}{Q} = \frac{10}{Q}$

MC = $\frac{\partial TC} {\partial Q} = 10$

AVC = $\frac{VC} {Q} = \frac{10Q} {Q} = 10$

AC = $\frac{TC} {Q} = \frac{10 + 10Q} {Q} = \frac{10} {Q} + 10$

 

B.). C = 10 + q²

AFC = $\frac{TFC}{Q} = \frac{10}{Q}$

MC = $\frac{\partial TC} {\partial Q} = 2Q$

AVC = $\frac{VC} {Q} = \frac{Q^{2} } {Q} = 10$

AC = $\frac{TC} {Q} = \frac{10 + Q^{2} } {Q} = 10 + Q$

 

C.). C = 10 + 10q – 4q² + q³

AFC = $\frac{TFC}{Q} = \frac{10}{Q}$

MC = $\frac{\partial TC} {\partial Q} = 10$ $- 8Q - 3Q^{2}$

AVC = $\frac{VC} {Q} = \frac{10 + 10Q - 4Q^{2} +Q^{3} } {Q} = \frac{10} {Q} + 10 - 4Q + Q^{2}$