Question

If the long-run total cost curve for each firm is given by TC = 400Q – 10Q2 + Q3, where Q is the quantity of output, in the long run, the marginal cost when Q=10 is , fixed costs at Q=10 are and average variable cost is. READ THE QUESTION CAREFULLY BEFORE RESPONDING.

Answer 1

$$MC=400-20Q+3Q^2$$

$$MC(Q=10)=400-200+3*100=500$$

$$TC=FC+VC$$

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

$$VC=TC-FC=400Q-10Q^2+Q^3-500$$

$$AVC=400-10Q+Q^2-\frac {500}{Q}$$