Question

If a firm produces mechanical keyboards according to TC=10+10Q−4Q ² +Q ³ , give formulas for and sketch the average fixed cost, marginal cost, average variable cost, and the average total cost curves.

Answer 1

To determine the different cost curves for the firm producing mechanical keyboards, we can use the formulas for average fixed cost, marginal cost, average variable cost, and average total cost. Creating a table and plotting the curves on a graph can help visualize the relationships between these costs.

Step-by-step explanation:

The given total cost function for a firm producing mechanical keyboards is TC = 10 + 10Q - 4Q2 + Q3. To determine the average fixed cost (AFC), we divide the total fixed cost (TC) by the quantity (Q). The marginal cost (MC) is the derivative of the total cost (TC) with respect to quantity (Q). The average variable cost (AVC) is obtained by subtracting the AFC from the average total cost (ATC).

To sketch the cost curves, we can create a table showing the company's output, total cost, marginal cost, average cost, variable cost, and average variable cost at different quantities. Using this table, we can plot the AFC, MC, AVC, and ATC curves on a graph to visualize the relationships between these costs.