Radon Research Corporation (RRC)is one of 24 firms in Albuquerque testing homes for dangerous levels of radon gas.There is a standard test that all testing companies use.The manager of RRC wants to know the number of homes to test in 2021in order to maximize the firm's profit.The manager forecasted a price of $160 for radon tests in 2021.The firm's marginal cost was estimated as $S M C = 200 - 15 Q + 0.8 Q ^ { 2 }$ where Q is the number of tests performed each week.RRC's fixed cost will be $250 per week.The average variable cost at RRC is

Question

Quizplus · Accepted Answer

To find the average variable cost, we need to divide the total variable cost by the number of tests performed. The total variable cost can be found by multiplying the marginal cost by the number of tests performed (Q):

Total variable cost = (200 - 15Q + 0.8Q^2)Q
                    = 200Q - 15Q^2 + 0.8Q^3

The average variable cost is then:

Average variable cost = Total variable cost / Q
                           = (200Q - 15Q^2 + 0.8Q^3) / Q
                           = 200 - 15Q + 0.8Q^2

Therefore, the answer is D.

Radon Research Corporation (RRC)is One of 24 Firms in Albuquerque SMC=200−15Q+0.8Q2S M C = 200 - 15 Q + 0.8 Q ^ { 2 }SMC=200−15Q+0.8Q2

Radon Research Corporation (RRC)is One of 24 Firms in Albuquerque $S M C = 200 - 15 Q + 0.8 Q ^ { 2 }$