Question

#8. (2 points +0.5 bonus) Suppose a cost function takes the form: TC = 2 + 2q - 3q2 + #8.a> (2 points) Derive fixed cost FC, marginal cost MC, variable cost VC, average total cost ATC, and average variable cost AVC. #8.b> (Bonus 0.5 point) Draw MC, ATC, and AVC together. You can use Wolfram Alpha to help you. We have some sample syntax in Slides #8 and #9 on Canvas. Alternatively, you can draw these by hand. To save the picture, you can use Sniplt or a similar software. Or you can take a screenshot with your phone and insert the picture to your document. Let us set the range of the horizontal axis from 0 to 3.

Answer 1

T = 2 + 2q - 392 49 3 Fixed cost IFC) is the cosp which Wemain fined and does not vary with output il fc = 21 Magginal cost is the change in tc due to production of additional writ of a commodity ML = d TC da - - d (2 + 2q - 392 +93) dq 2-6q Ime a the total variable rañable Coff is cost q Production Ive = 29 - 392 tq3 ATC = Tc q = 2 + 2q - a + 2- H ANCIJA 2 Lt92 Scained with CamScanner

DATE L'Arc (99 = Tvc (9) = 29 392 +9 I Arc (a) 2-309 + 927 MC, ATC, AVC together color Custe In the shows graph Red marginal cost Blue colos Shows Average Total cost reen color: shows. Average Variable Cost CS CamScanner

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