### Average cost-minimizing activity level

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##### Reference no: EM1368050

Average Cost Minimization. Better Buys, Inc., is a leading discount retailer of wide-screen digital and cable-ready plasma HDTVs. Revenue and cost relations for a popular 55-inch model are:

TR = \$4,500Q ï?­ \$0.1Q2

MR = ï?TR/ï?Q = \$4,500 ï?­ \$0.2Q

TC = \$2,000,000 + \$1,500Q + \$0.5Q2

MC = ï?TC/ï?Q = \$1,500 + \$1Q

A. Compute output, marginal cost, average cost, price, and profit at the average cost-minimizing activity level.

B. Compute these values at the profit-maximizing activity level.

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