Question

Give the formulas for and plot AFC,MC,AVC and AC if the cost function is 1.C=10+10Q, 2. C=10+q², 3.C=10+10q-4q² +q³.

Answer 1

$AFC = \frac{FC}{Q}$

MC is the derivative of C with respect to q.

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

$AC = \frac{C}{Q}$

The FC is anything in the C equation that isn't attached to a Q. The VC is anything that is attached to a Q.

a.

a.

C = 10 + 10Q

FC = 10

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

MC = 10

AVC = 10

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

b.

$C = 10 + Q^2$

FC = 10

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

MC = 2Q

AVC = Q

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

c.

$C = 10 + 10Q - 2Q^2 + Q^3$

FC = 10

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

$MC = 10 - 4Q + 3Q^2$

$AVC = 10 - 2Q + Q^2$

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

Graphs

a.

b.

c.