Suppose a firm's total cost function is given by TC = 6,000 + 2Q + 0.25Q², where MC = 2 + 0.5Q. The output level that minimizes total cost is ____. A) 154.9 B) 175 C) 150 D) 0

Question

Quizplus · Accepted Answer

The output level that minimizes total cost cannot be directly determined from the given total cost (TC) function and marginal cost (MC) function. However, the question seems to misunderstand the concept of cost minimization. Firms typically aim to minimize average costs or maximize profits rather than minimizing total costs. Total costs are minimized when output is zero (Q=0), as fixed costs (6,000 in this case) are the only costs incurred with no production.

Suppose a Firm's Total Cost Function Is Given by TC