An average variable cost function is estimated as $A V C = 96 - 2 Q + 0.05 Q ^ { 2 }$ Which of the following cost functions is associated with this estimate? A)SMC = 96 - 4Q + 0.1Q² B)TVC = 96Q - 2Q² + 0.05Q³ C)TVC = 96Q + 4Q² + 0.15Q³ D)SMC = 96 - 4Q + 0.15Q² E)both b and d

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Quizplus · Accepted Answer

The average variable cost (AVC) is given by $AVC = \frac{TVC}{Q}$, where TVC is the total variable cost. To find the TVC, we integrate the AVC function with respect to Q, which gives us $TVC = 96Q - 2Q^2 + 0.05Q^3$. The marginal cost (MC) is the derivative of the TVC with respect to Q, which yields $MC = 96 - 4Q + 0.15Q^2$. Therefore, both B and D are correct.

An Average Variable Cost Function Is Estimated As AVC=96−2Q+0.05Q2A V C = 96 - 2 Q + 0.05 Q ^ { 2 }AVC=96−2Q+0.05Q2

An Average Variable Cost Function Is Estimated As $A V C = 96 - 2 Q + 0.05 Q ^ { 2 }$