Suppose that a firm's long-run total cost curve can be expressed as $T C = 10 Q ^ { 2 } + 20 Q$. This firm's long-run average total cost curve can be expressed as
A) $A C = 20 Q + 20$.
B) $A C = 10 Q + 20$.
C) $A C = 10 + 20 Q$.
D) $A C = 10 Q ^ { 2 }$.

Question

Quizplus · Accepted Answer

The long-run average total cost (LRATC) is calculated as the long-run total cost (LRTC) divided by the quantity of output (Q).

LRATC = LRTC / Q

Substitute the given expression for LRTC:

LRATC = (10Q^2 + 20Q) / Q

LRATC = 10Q + 20

Therefore, the firm's LRATC curve can be expressed as AC = 10Q + 20.

Suppose That a Firm's Long-Run Total Cost Curve Can Be TC=10Q2+20QT C = 10 Q ^ { 2 } + 20 QTC=10Q2+20Q

Suppose That a Firm's Long-Run Total Cost Curve Can Be $T C = 10 Q ^ { 2 } + 20 Q$