Question

Please help me solve this

Answer 1

9514 1404 393

Answer:

  a) q = 15 at minimum average cost; q = 10 at minimum marginal cost

  b) marginal cost = average cost = 225 at q = 15

Explanation:

The average cost is the total cost divided by the number of units.

  A = C/q = 300 -10q +1/3q^2

The marginal cost is the derivative of the total cost.

  M = 300 -20q +q^2

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a) The minimum average cost is where its derivative is zero.

  A' = 0 = -10 +2/3q   ⇒   q = 15

The minimum marginal cost is where its derivative is zero.

  M' = -20 +2q   ⇒   q = 10

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b) The average cost for 15 units produced is ...

  A(15) = 300 -10(15) +1/3(15^2) = 225

The marginal cost at that same production level is ...

  M(15) = 300 -20(15) +15^2 = 225

The average cost and marginal cost are equal at the minimum average cost.