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Suppose a firm has following total cost function: TC=600+4Q+2Q². Find the fixed cost (FC), total variable cost (TVC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC) for this firm.

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Final answer:

The fixed cost (FC) for this firm is $600. The total variable cost (TVC) is 4Q + 2Q^2. The average variable cost (AVC) is 4 + 2Q. The average total cost (ATC) is 600/Q + 4 + 2Q. The marginal cost (MC) is calculated using the change in total cost and change in output.

Step-by-step explanation:

To find the fixed cost (FC), we look at the coefficient of the constant term in the total cost function. In this case, the fixed cost is $600.

To find the total variable cost (TVC), we subtract the fixed cost from the total cost. In this case, TVC = TC - FC = 4Q + 2Q^2.

To find the average variable cost (AVC), we divide the total variable cost by the quantity produced. In this case, AVC = TVC / Q = (4Q + 2Q^2) / Q = 4 + 2Q.

To find the average total cost (ATC), we divide the total cost by the quantity produced. In this case, ATC = TC / Q = (600 + 4Q + 2Q^2) / Q = 600/Q + 4 + 2Q.

To find the marginal cost (MC), we calculate the change in total cost divided by the change in output. In this case, MC = ΔTC / ΔQ = TC(Q2) - TC(Q1) / (Q2 - Q1).

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