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Short-Run Economic Costs Suppose a firm has a short-run cost equation of C(q) = 0.3q3 -Ā  15q2 + 200q + 100, and short-run marginal cost equation of MC(q) = 0.9q2 - 30q + 200, if the firm produces 25 units of output:

a. Solve for a total fixed cost, the total variable cost, and total cost. (3 points)

b. Solve for the firm's average fixed cost, the average variable cost, and average total cost. (3 points)

c. Use the MC(q) equation to solve for the marginal cost of the last unit produced. (2 points)

d. Solve whether the firm has short-run economies of scale or diseconomies of scale. (2 points)

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019
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Related questions

Ā  If a firm is a price taker,

STC = 15q2 + 8q + 45

SMC = 30q + 8

a) Find the firm's fixed cost and variable cost, average total cost, and average variable cost in the short-run.

b) Find the firm's short-run supply curve function.

c) If P = 15 is given, what is the optimal output level for this firm to maximize its profit?

d) Does this firm have a shutdown price?

36) A firm encountering economies of scale over some range of output will have a:

a) rising long-run average cost curve.

b) falling long-run average cost curve.

c) constant long-run average cost curve.

d) rising, then falling, then rising long-run average cost curve.

37) When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) a violation of the law of diminishing returns.

38) The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:

a) economies of scale.

b) normative economies.

c) diminishing marginal returns.

d) an increasing marginal product of labor.

39) If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) increasing the average total costs.

40) Economies and diseconomies of scale explain why the:

a) short-run average fixed cost curve declines so long as output increases.

b) marginal cost curve must intersect the minimum point of the firm's average total cost curve.

c) long-run average total cost curve is typically U-shaped.

d) short-run average variable cost curve is U-shaped.

If a firm is a price taker and incurs total cost with a function of: and a marginal cost with a function of: SMC = 30q + 8

a) Find the firm's fixed cost and variable cost, average total cost, and average variable cost in the short-run.

b) Find the firm's short-run supply curve function.

c) If P = 15 is given, what is the optimal output level for this firm to maximize its profit?

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