ECO302 Chp 7 HW Solutions

ECO302 Chp 7 HW Solutions - Chapter 7 1. Suppose a firm has...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 7 1. Suppose a firm has a cost function: = + + C 5 2q2 q3 . D raw a table like Table 7.1 for q between 0 and 4. D raw graphs similar to figure 7.1, with one graph for FC, VC, and C and another for MC, AFC, AVC, and AC. Q FC VC C MC AFC AVC AC 5 5-------- 1 5 3 8 7 5 3 8 2 5 16 21 20 2.5 8 10.5 3 5 45 50 39 1.67 15 16.67 4 5 96 101 64 1.25 24 25.25 Q is the quantity of output given in the problem. FC are the fixed costs that remain constant in the cost equation. VC are the variable costs that change with the level of output. C is total cost calculated by adding FC and VC . MC is marginal cost calculated by taking the derivative of the cost function (d C /d Q ). AFC are the averaged fixed cost calculated by dividing FC by Q . AVC are the averaged variable costs calculated by dividing VC by Q . AC are the average total costs calculated by adding AFC and AVC . Chapter 7...
View Full Document

This note was uploaded on 09/18/2011 for the course ECO 302 taught by Professor Bartz-mavez during the Spring '09 term at University of Miami.

Page1 / 4

ECO302 Chp 7 HW Solutions - Chapter 7 1. Suppose a firm has...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online