Assignment2 - ASSIGNMENT 2 Economics 203 Fall 2011 Due:...

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ASSIGNMENT 2 Economics 203 – Fall 2011 Due: Friday Nov 4th, 2011 at 3:00 pm . The assignment is out of 100 marks and counts towards 9% of your final grade. If you work with others, please indicate their names in the top right-hand corner of your assignment (you will not be penalized). In any event, write up the work on your own. Copying will be considered cheating. Question 1 (25 marks): A firm has two plants that produce identical output. The cost functions are 23 1 2 1: 10 4 2: 10 2 Plant C Q Q Q Plant C Q Q Q a) Derive the average total cost function, marginal cost function, variable cost function and fixed cost function (if exists) for plant 1. (5 marks) b) Derive the average total cost function, marginal cost function, variable cost function and fixed cost function (if exists) for plant 2. (5 marks) c) At what output levels does the average cost curve of each plant reach its minimum? (5 marks) d) Show that the marginal cost is equal to the average cost at the minimum point on the average cost curve. (5 marks) e)
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This note was uploaded on 01/27/2012 for the course ECON 204 taught by Professor Beryl li during the Spring '11 term at University of Victoria.

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Assignment2 - ASSIGNMENT 2 Economics 203 Fall 2011 Due:...

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