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TC = -4.74 + 0.0055Q Using the above equation calculate fixed cost, average total cost and...

TC = -4.74 + 0.0055Q

Using the above equation calculate fixed cost, average total cost and marginal cost if 25 units produced

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Answer #2

FC=the cost is same at all level, and it is equal to total cost at Q=0

FC=-4.74

it is minus means the firm is getting a subsidy to set up the business

it is same at all output levels

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Variable cost is the variable term in the total cost function

Variable cost =0.0055Q

AVC=VC/Q

AVC=0.0055Q/Q=0.0055

it is constant at all output levels

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marginal cost is the change in total cost and a change in function is found by differentiation

MC=dTC/dQ=0.0055

the MC is $0.0055

it is constant at all the output levels.

answered by: anonymous
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