Market demand is given as Q_D= 110 - 2P.Market supply is given as Q_S= 3P + 10.Each identical firm has MC = 10Q and ATC = 5Q.What is a firm's average total cost

Question

Quizplus · Accepted Answer

To find the average total cost (ATC), we need to divide total cost (TC) by quantity produced (Q).

Total cost can be calculated as: 
TC = MC*Q + FC 
where MC is marginal cost, Q is quantity produced, and FC is fixed cost.

Fixed cost is not given, but we can assume it to be zero as there is no information provided.

Therefore, 
TC = MC*Q

ATC can then be calculated as: 
ATC = TC/Q = MC

Substituting the given marginal cost equation, we get: 
ATC = 10Q/Q = $10

Therefore, the answer is (C): $10.

As for the best choice, it is not specified what the question is asking for. Is it asking for the best production level for the firm or the best way to maximize profits? Without more information, it is difficult to give a clear answer.

Market Demand Is Given as QD = 110 - 2P

Market Demand Is Given as Q_D= 110 - 2P