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Calculate the firm's
(I) variable cost at output level 2, 4 and 6
(Ii) marginal cost at output level 2 and 6
(Iii) average cost at output level 2 and 3?
Calculate the firm's
(I) variable cost at output level 2, 4 and 6
(Ii) marginal cost at output level 2 and 6
(Iii) average cost at output level 2 and 3?
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ChatGPT
Aug 9
To calculate the firm's variable cost at output levels 2, 4, and 6, we need to know the total cost and fixed cost at each output level.
Let's assume the total cost and fixed cost at output levels 2, 4, and 6 are as follows: Output level 2: Total cost = $100 Fixed cost = $50
(II) Marginal cost at output level 2 and 6: Marginal cost is the additional cost incurred by producing one more unit of output.
Marginal cost at output level 2: MC = Change in total cost / Change in output MC = ($200 - $100) / (4 - 2) = $50
Marginal cost at output level 6: MC = Change in total cost / Change in output MC = ($300 - $200) / (6 - 4) = $50
(III) Average cost at output level 2 and 3: Average cost is the total cost divided by the output level.
Average cost at output level 2: AC = Total cost / Output AC = $100 / 2 = $50
Average cost at output level 3: AC = Total cost / Output AC = $150 / 3 = $50
Therefore, the firm's variable cost at output level 2, 4, and 6 is $50, $150, and $250 respectively. The marginal cost at output level 2 and 6 is $50, and the average cost at output level 2 and 3 is $50.
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Google Gemini AI
Aug 9
Given Information:
- Total cost function: TC = 2Q^2 + 4Q + 6 - Output levels: 2, 4, and 6
(I) Variable Cost:
Variable cost is equal to total cost minus fixed cost. The fixed cost in this case is 6.