The manager of Greene Enterprises,Inc.,recently estimated its average variable cost (AVC)function to be $A V C = 88 - 0.026 Q + 0.000003 Q ^ { 2 }$ Greene Enterprises faces total fixed costs (TFC)of $300,000.When Greene's output is 2,000 units,what is average variable cost (AVC)?
A)$20
B)$48
C)$62
D)$72
E)$85

Question

Quizplus · Accepted Answer

To find the average variable cost (AVC) at an output level of 2,000 units, substitute $Q = 2000$ into the AVC function: $AVC = 88 - 0.026(2000) + 0.000003(2000)^2$. This calculation results in an AVC of $48.

The Manager of Greene Enterprises,Inc AVC=88−0.026Q+0.000003Q2A V C = 88 - 0.026 Q + 0.000003 Q ^ { 2 }AVC=88−0.026Q+0.000003Q2

The Manager of Greene Enterprises,Inc $A V C = 88 - 0.026 Q + 0.000003 Q ^ { 2 }$