Business Economics

posted by .

When we are given an expression for the Short Run Total Cost Curve (for eg: 8 +
3Q - 1.5Q^2 + 0.25Q^3), how do you derive expressions for the following:

1. Average Fixed Costs
2. Average Viarable Costs Curve
3. Marginal Costs Curve
4. Short Run Supply Curve

I also have a second question:
In perfect competition, if you are given the firm's total cost curve (for eg:
450 + 15Q + 2Q^2), and you are also given the Price, how do you find out the
firm's profit maximising level of output and it's profit/loss level?

An answer to either of these questions or preferably both would be great.
Thank you.

Your equation: TC = 8 + 3Q - 1.5Q^2 + 0.25Q^3
1) Total fixed costs are 8. So avg fixed costs are 8/Q.
2) Ergo Avg variable costs are (TC-8)/Q
3) Marginal cost is the first derivitive of total costs. (use calculus)
4) Short run supply is marginal cost curve.

Always, always, maximize when MC=MR
For a perfect competitor, MR=Price.
MC is the first derivitive of TC.
Profit/loss = Total revenue - Total cost. and TR=P*Q. Just plug in your maximizing Q.

  • Business Economics -

    mc=d/dq(8+3Q - 1.5Q^2 + 0.25Q^3)

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. economics

    This is going to be really long, but I want to see if my answers are correct. This is problem number 10.10 in my Intermediate Microeconomics book. A perfectly competitive painted necktie industry has a large number of potential entrants. …
  2. Microeconomics help please (urgent)

    True or False? Explain your reasoning. a. The short-run average total cost can never be less than the long-run average total cost. b. The short-run average variable cost can never be less than the long-run average total cost. c. In
  3. economics

    if production displays economies of scale, the long run average cost curve is: a) upward sloping b) above the short run average total cost curve C0 below the long run marginal cost curve d) downward sloping
  4. microeconomics

    The short-run cost curve for each firm's long run equilibrium output is C=y^2-20y+400. Calculate the short-run average and marginal cost curves. At what output level does short-run average cost reach a minimum?

    suppose that the short run costs for a paintbrush manufacturer are given by the expression: TC= 100+2Q+.01 Q2 A. WAT ARE THE FIXED COSTS OF THIS MANUFACTURE?
  6. Management & Econ

    a) Explain why a short run average cost curve only touches the long run average cost curve at one point on the long run average curve. b) Define clearly the concept of returns to scale c)What are the two causes of the region of economics …
  7. economics

    A firm has fixed costs of $30.00 and variable costs as indicated in the table below. Complete the table. Instructions: Round your answers so that you enter no more than 2 decimal places. Total Product Total Fixed Cost Total Variable …
  8. economics

    For the total variable cost (TVC), draw a positive total fixed cost (TFC) and total cost (TC) curves. Then derive the associated marginal cost (MC), average total cost (ATC), average variable (AVC) and average fixed cost (AFC) curves. …
  9. Economics

    PROBLEM SOLVING 1: "ANDREA'S SOFTWARE BUSINESS" I. Complete the following table: DO THE MATH Data Number of Programs Total Fixed Costs Total Variable Costs Total Costs Marginal Costs Average Fixed Costs Average Variable Costs Average …
  10. Microeconomics

    A perfectly competitive industry has a large number of potential entrants. Each firm has an identical cost structure such that long run average cost is minimized at an output of 10 units (qi=10 ). The minimum average cost is R5 per …

More Similar Questions