Question

Give the formulas for and plot average fixed cost, afc, marginal cost, mc, average variable cost, avc, and average cost, ac, if the cost function is: c. Part 2 marginal cost is: mc =

Answer 1

The formulas for average fixed cost (AFC), marginal cost (MC), average variable cost (AVC), and average cost (AC) can be derived from the cost function and they provide insights into the relationship between costs and output quantities.

Step-by-step explanation:

The formulas for average fixed cost (AFC), marginal cost (MC), average variable cost (AVC), and average cost (AC) can be derived from the cost function.

1. AFC = FC / Q, where FC is the fixed cost and Q is the quantity produced.

2. MC = ΔTC / ΔQ, where ΔTC is the change in total cost and ΔQ is the change in quantity produced.

3. AVC = VC / Q, where VC is the variable cost.

4. AC = TC / Q, where TC is the total cost.

These cost curves provide insights into the relationship between costs and output quantities, and can be plotted to visually analyze cost behavior.