A variable cost function of the form: VC = 52 + 2Q + 3Q^{2 implies a marginal cost curve that is} A) constant. B) upward sloping. C) U-shaped. D) quadratic.

Question

Quizplus · Accepted Answer

The variable cost function VC = 52 + 2Q + 3QS1U1P12 implies that the variable cost per unit increases with Q, S1, U1, and P1. This is because the coefficients of Q, S1, U1, and P1 are all positive. The marginal cost is the derivative of the variable cost function with respect to Q, which is MC = 2 + 3S1U1P1. The derivative is a constant (2 + 3S1U1P1), which means that the marginal cost curve is upward sloping. Therefore, the correct answer is B.

A Variable Cost Function of the Form: VC = 52