A short-run total cost function,TC = 100 + 32Q - 4Q² + 0.4Q³,indicates the existence of A)a linear total cost curve. B)a constant average variable cost curve. C)a U-shaped average variable cost curve. D)a constant marginal cost curve.

Question

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The presence of the quadratic term (-4Q²) and the cubic term (0.4Q³) in the short-run total cost function indicates that there is a U-shaped average variable cost curve. The linear term (32Q) indicates that the marginal cost curve is increasing at a constant rate. The constant term (100) indicates that there is a fixed cost component to the total cost function.

A Short-Run Total Cost Function,TC = 100 + 32Q -