Question

In: Economics

This time your firm was only able to give you information about your total cost. That...

This time your firm was only able to give you information about your total cost. That information is given below: T C = 128 + 8Q + 2Q 2

(a) Find the marginal cost and the average cost.

(b) Calculate the optimal cost-minimizing quantity

Solutions

Expert Solution

(A) Marginal cost (MC) = dTC/dQ = 8 + 4Q

Average cost = TC/Q = 128/Q + 8 + 2Q

(B) At optimal point, MC = AC

8 + 4Q = 128/Q + 8 + 2Q

2Q = 128/Q implies Q = 8

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Consider the following premerger information about Firm A and Firm B: Firm A Firm B Total...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B Total earnings $ 2,600 $ 500 Shares outstanding 1,000 250 Price per share $ 33 $ 37 Assume that Firm A acquires Firm B via an exchange of stock at a price of $39 for each share of B's stock. Both A and B have no debt outstanding. a. What will the earnings per share (EPS) of Firm A be after the merger? (Do not...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B   Total...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B   Total earnings $ 2,700 $ 900   Shares outstanding 1,000 200   Price per share $ 29 $ 33 Assume that Firm A acquires Firm B via an exchange of stock at a price of $35 for each share of B's stock. Both A and B have no debt outstanding. a. What will the earnings per share, EPS, of Firm A be after the merger? (Do not...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B   Total...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B   Total earnings $ 1,900 $ 500   Shares outstanding 900 250   Price per share $ 37 $ 41 Assume that Firm A acquires Firm B via an exchange of stock at a price of $43 for each share of B's stock. Both A and B have no debt outstanding. a. What will the earnings per share (EPS) of Firm A be after the merger? (Do not...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B Total...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B Total earnings $ 2,100 $ 600 Shares outstanding 1,100 300 Price per share $ 39 $ 43 Assume that Firm A acquires Firm B via an exchange of stock at a price of $45 for each share of B's stock. Both Firm A and Firm B have no debt outstanding. a. What will the earnings per share (EPS) of Firm A be after the merger?...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B   Total...
Consider the following premerger information about Firm A and Firm B: Firm A Firm B   Total earnings $ 2,000 $ 1,000   Shares outstanding 1,100 250   Price per share $ 39 $ 43 Assume that Firm A acquires Firm B via an exchange of stock at a price of $45 for each share of B's stock. Both Firm A and Firm B have no debt outstanding. a. What will the earnings per share (EPS) of Firm A be after the merger?...
Provide enough information for your peers to be able to calculate a company's total, price, and...
Provide enough information for your peers to be able to calculate a company's total, price, and quantity variances. You can focus on labor or materials, whichever you would prefer.
The table shows total cost and total revenue information for a perfectly (or purely) competitive firm....
The table shows total cost and total revenue information for a perfectly (or purely) competitive firm. Quantity Total cost Total revenue 00 500500 00 11 600600 135135 22 710710 270270 33 830830 405405 44 960960 540540 55 11001100 675675 66 12501250 810810 77 14101410 945945 88 15801580 10801080 99 17601760 12151215 1010 19501950 13501350 Firms earning a loss will sometimes shut down in the short run. What quantity will the firm produce if it shuts down in the short run?...
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total...
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 88,000 $ 18,500 Shares outstanding 45,000 20,000 Per-share values: Market $ 45 $ 16 Book $ 16 $ 7 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $5 per share, and that neither firm has any debt before or after the merger. Construct the postmerger balance sheet for Firm X...
You are trying to determine the total cost for XYZ's monthly cash collection system. Your firm...
You are trying to determine the total cost for XYZ's monthly cash collection system. Your firm receives an average of 4000 remittances per month with an average face value of 7500. Total float come to 7 days. 6% is your average opportunity cost and your variable cost is 0.35 per check. What is XYZ's cost for its cash collection system? a. 32,540 b. 34,400 c. 35,800 d. 36,400
You are able to obtain, for a sample of 9822 individuals, information about their alcohol consumption...
You are able to obtain, for a sample of 9822 individuals, information about their alcohol consumption habits. This data is shown in the excel spreadsheet named alcohol data.xlsx. The data contains the following variables: id: unique identier for each individual i abuse before tax: takes value 1 if individual reports that she abused of alcohol before the tax liquor was introduced in Calgary, 0 if she reports that she did not abuse of alcohol before the tax liquor was introduced...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT