Answer to Question #282987 in Microeconomics for Bayisa Tafa

Question

Given a short run cost function as TC= -Q³-2Q²+60Q+100, find the maximum value of AVC and MC.

a. Determine the total fixed cost(TFC) for producing 100 and 300 units of outputs, respectively.

b. What is the average fixed cost (AFC) for 100 and 300 units of outputs?

Answer 1

$TC=-Q^3-2Q^2+60Q+100,$

$TC'=-3Q^2-4Q+60,$

$AVC=244.29~(Q=3.8549),$

$MC=61.33~(Q=-0.667),$

$TFC=\int_{100}^{300}TC'dQ=-25852000,$

$AFC=\frac{TFC}Q=-129260.$