Market demand is given as Q_D= 140 - 4P.Market supply is given as Q_S= 3P.Each identical firm has MC = 5Q and ATC = 2Q.What is a firm's average total cost

Question

Quizplus · Accepted Answer

To find the firm's ATC, we need to find the total cost (TC) and divide it by the quantity produced (Q). 
The firm's total cost is equal to the sum of its fixed costs (FC) and its variable costs (VC). Since the problem does not provide information on the firm's FC, we can assume that it is zero.

The firm's VC is equal to the product of its MC and Q. 
So, VC = 5Q.

Thus, the firm's TC is equal to VC (since FC is zero), which is 5Q. 
To find the firm's ATC, we divide TC by Q: ATC = TC/Q. 
Substituting VC for TC, we get: ATC = VC/Q = 5Q/Q = 5.

Therefore, the firm's average total cost is $5.

As for the best choice, we are not given any specific context or decision to make, so it is unclear what is being asked.

Market Demand Is Given as QD = 140 - 4P

Market Demand Is Given as Q_D= 140 - 4P