Asked by Jill
The short-run cost curve for each firm's long run equilibrium output is C=y^2-20y+400. Calculate the short-run average and marginal cost curves. At what output level does short-run average cost reach a minimum? I already know the MC and the SRA is TC/Q. I got the minimum as 10. Is that right?
b) Calculate the short-run supply curve for each firm and the industry short-run supply curve? Total market demand is y=2500-20p. Each firm has an identical cost structure such that long-run avg. cost is minimized at an output of 20. The minimum avg. cost is $30.
b) Calculate the short-run supply curve for each firm and the industry short-run supply curve? Total market demand is y=2500-20p. Each firm has an identical cost structure such that long-run avg. cost is minimized at an output of 20. The minimum avg. cost is $30.
Answers
Answered by
lachisa
the short-run average cost is
TAC=y^2/y-20y/y+400/y
=y-20+400/y
The marginal cost curve is the first derivative of the cost curve.
so,mc=2y-20
short run average cost reaches it's minimum when smc=sAc or the derivative of SAC=0
SO,2y-20=y-20+400/y
TAC=y^2/y-20y/y+400/y
=y-20+400/y
The marginal cost curve is the first derivative of the cost curve.
so,mc=2y-20
short run average cost reaches it's minimum when smc=sAc or the derivative of SAC=0
SO,2y-20=y-20+400/y
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.