Question

If TC = 321 + 55Q - 5Q², then average total cost at Q = 10 is:

1) 10.2
2) 102
3) 37.1
4) 371
5) 321

Answer 1

The average total cost at Q = 10 is calculated by dividing the total cost function TC = 321 + 55Q - 5Q² by Q, resulting in an ATC of 37.1.

Step-by-step explanation:

The student's question addresses the concept of average total cost in the field of economics or business studies. To find the average total cost (ATC) at Q = 10 for the given total cost (TC) function TC = 321 + 55Q - 5Q², we divide TC by the quantity Q. Plugging in Q = 10 into the TC equation, we get TC = 321 + 55(10) - 5(10)² = 321 + 550 - 500 = 371. Then, ATC at Q = 10 is calculated as ATC = TC/Q = 371/10 = 37.1. Therefore, the ATC at Q = 10 is 37.1, answering option 3 of the multiple-choice question.