Ec 115 Problem Set 6. 1. Consider the following total cost function C = q 2 + 6 q + 16 : (a) Find the average cost (AC) and marginal cost (MC) functions. (b) For what value of q is AC a minimum (check socs)? (c) For what values of q is (i) MC below AC and (ii) MC is above AC? (d) Sketch on the same graph the MC and AC functions. q is given where MC = p: Find this supply function q = q ( p ) = 1 4 [ p 6] 2 16 : State a restriction on p p is too low? 2. Suppose a monopolist faces demand function q = 36 2 p: (a) Find the inverse demand function and derive the revenue function (b) Find the average revenue and marginal revenue functions. C = q 2 + 6 q + 16 : What level of q
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