question 4: a, b, c Suggested Readings - 167 3. What is the special meaning of...

Question

Question

question 4: a, b, c

Suggested Readings - 167 3. What is the special meaning of each type of cost (TVC, TFC, TC, AVC, AFC, ATC, and MC)? 4. Suppos

business economics

Answer 1

Answer #1

4)

a) TFC=first of TC

TVC=TC-TFC

AVC=TVC/Q

ATC=TC/Q

MC=change in TC/change in Q

b) Setting P=MC, the firm will produce Q = 0 units as the price is less than minimum AVC

c) Setting P=MC, the firm will produce Q = 2000 units where the loss would be TR-TC = -5000

Answer 2

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