# Managerial Economics

posted by .

Can someone explain what is a cubic cost function? I'm taking a managerial economics course, but I've never taken any algebra or calculus; so I'm struggling. I'd like to grasp the purpose of what it is and then try to figure out how to do it. thanks!

• Managerial Economics -

A so-called cubic function is nothing else than a polynomial function of degree 3.

f(x)=ax^3+bx^2+cx+d, where a,b,c,d are fixed, but not determined constant coefficients, imposed the condition a != 0.

• Managerial Economics -

Wow, this definition is like greek. What is a polynomial function of degree 3? I know what a constant is and also a coefficent. But what is "imposed the condition a!=0? Can someone explain this in a simpler way that doesn't involve algebra or calculus? Thanks

• Managerial Economics -

Basically, the point of cubic is that you can use the cube (third power) of the number of things produced to predict the total cost of making that many things. It so happens that x^3 (x cubed) very nicely represents certain economies/not of scale in production; it "looks right".

So the whole point is that some algebra can provide a nice formula that approximates the reality of cost functions for which marginal cost (the cost of "making one more") first goes down, then goes up. And some calculus can confirm it.

## Similar Questions

1. ### Managerial Economics

Managerial Economics uses_____to help solve problems. a. mathematical programming b. Statistics c. decision sciences d. microeconomics e. all of the above
2. ### managerial economics

EXPLAIN 5 FUNCTIONS OF MANAGERIAL ECONOMICS WITH SUITABLE EXAMPLE.
3. ### MANAGERIAL ECONOMICS

EXPLAIN THE ROLE AND RESPONSIBILITY OF MANAGERIAL ECONOMICS.
4. ### managerial economics

Can someone break down the basic components of managerial economics to me. I have having a really tough time with this class. H-E-L-P.
5. ### managerial economics

Can someone explain cost structure and market structure to me please.
6. ### managerial economics

Can someone explain cost structure and market structure to me please.
7. ### Managerial Economics

For a cost function C = 100 + 10Q + Q2, the average variable cost of producing 20 units of output is A. 10 B. 20 C. 30 D. None of the statements associated with this question are correct
8. ### managerial economics

firms demand function,p=24-0.54q and the average cost function,AC=Q2-8Q+36+3/Q,calculate the level of output Q, which maximize total revenue,maximizes profits
9. ### managerial economoics

close relationship between mnagement and economics has led to the development of managerial economics
10. ### economics

1. why is the subject of managerial economics relevant to problem of global warming?

More Similar Questions