Managerial ECON
posted by lost .
The chief economist for Argus Corporation, a large appliance manufacturer, estimated the firm’s short run cost function for vacuum cleaners using an average variable cost function of the form
AVC = a + bQ + cQ2
where AVC dollars per vacuum cleaner and Q number of vacuum cleaners produced each month. Total fixed cost each month is $180,000. The following results were obtained:
DEPENDENT VARIABLE:
AVC RSQUARE 0.7360 FRATIO 39.428 PVALUE ON F 0.0001
OBSERVATIONS:19 0
pARAMETER STANDARD
VARIABLE ESTimate error
INTERCEPT 191.93 54.65
0.0305 0.00789
0.0000024 0.00000098
TRATIO PVALUE
3.512 0.0029
23.866 0.0014
2.449 0.0262
a. Are the parameter estimates statistically significant at the 2 percent level of significance?
b. Do the results indicate that the average variable cost curve is Ushaped? How do you know?
c. If Argus Corporation produces 8,000 vacuum cleaners per month, what is the estimated average variable cost? Marginal cost? Total variable cost? Total cost?
d. Answer part c, assuming that Argus produces 10,000 vacuum cleaners monthly.
e. At what level of output will average variable cost be at a minimum? What is minimum average variable cost?
Respond to this Question
Similar Questions

Managerial Econ 2
1)The chief economist for Argus Corporation, a large appliance mfg., estimated the firm’s shortrun cost function for vacuum cleaners using an average variable cost function of the form: 3 AVC = a + bQ + cQ Where AVC = dollars per … 
ecoc
i can not figure this out the economist for the grand corporation has estimated the company's cost function, using time series data, to be TC=50+16Q2Q2+0.2Q3 a.plot this curve for quantites 1 to 10 b.calculate the average total cost,average … 
econ
Suppose a firm produces output using the technology Q=K1/3 L2/3 Find a. The long run cost function b. The short run cost function if capital is stuck at 10 units. c. The profit maximizing level of output as a function of the price … 
home economics
The economist for the Grand Corporation has estimated the company’s cost function, using the times series data to be TC=50+16Q2Q2+0.2Q3 a. Plot this curve for quanties 1 to 10 b. Calculate the average total cost, average variable … 
econ
The economist for the Grand Corporation has estimated the company’s cost function, using the times series data to be TC=50+16Q2Q2+0.2Q3 a. Plot this curve for quanties 1 to 10 b. Calculate the average total cost, average variable … 
Economics Help Please!!!
MC = 125  0.42Q + 0.0021Q^2 Given the estimated marginal cost function, what are the total, variable, and average cost functions? 
To: Economyst
Hi there. You helped me with a couple of questions regarding Econ. I appreciate the help but my issue is I don't understand how you calculate the minimum average variable cost or the output that maximizes profit. I do understand that … 
Economics
Consider the production function Q= 20K^(1/2)L^(1/2). The firm operates in the short run with 16 units of capital. a. The firm's shortrun production function is Q=? 
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 … 
MATHS
A company is a monopolist. The demand function for its product is as follows: Q = 60 – 0.4P + 6Y + 2A Where Q = quantity sold in units P = Price per unit Y = per capita disposal income (thousands of dollars) A = hundreds of dollars …