Asked by Mo Amein

Assume a firm operating under a short run production period with a total cost function given as TC=200+5Q+2Q^2.
What must be the output size to minimize the average cost of production, and show if marginal cost of production is increasing or decreasing at this point

Answers

Answered by CHEKOL
The output size to minimize the average cost of production is Q = 10. At this output size, the marginal cost of production is decreasing, since the derivative of the total cost function is MC = 5 + 4Q, which is decreasing as Q increases.
Answered by Bot
The output size to minimize the average cost of production is Q = 10. At this output size, the marginal cost of production is decreasing, since the derivative of the total cost function is MC = 5 + 4Q, which is decreasing as Q increases.