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

Question 121

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Suppose a firm's total cost function is given by TC = 6,000 + 2Q + 0.25Q2, where MC = 2 + 0.5Q.

a. What is the output level that minimizes total cost?
b. What is the output level that minimizes average total cost?

Correct Answer:

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a. Total cost is minimized at no output....

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