Question

An economist estimated that the cost function of a single-product firm is:

C(Q) = 70 + 25Q + 20Q² + 10Q³.

Based on this information, determine the following: I can't figure G out?

. The fixed cost of producing 10 units of output.

$ 70

b. The variable cost of producing 10 units of output.

$ 12,250

c. The total cost of producing 10 units of output.

$ 12,320

d. The average fixed cost of producing 10 units of output.

$ 7

e. The average variable cost of producing 10 units of output.

$ 1,225

f. The average total cost of producing 10 units of output.

$ 1,232

g. The marginal cost when Q = 10.

Answer 1

Answer :

Marginal cost (MC) at 10 units -

         MC = change in TC (total cost)/ change in quantity (units)

C (Q) = 70 + 25 Q + 20Q2 + 10 Q3

*To determine MC we take first derivative of TC with respect to Q

So,

    MC = ? TC/ ?Q = 25 + 40 Q + 30Q2         

                           =25 + 40 (10) +30 (10)2

                          = 25 + 400 + 600

                          = 10,25

So MC at 10 unit is 10,25

* i hope the answer will help you. if you have any confusion feel free to ask.

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