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A firm has a total cost function:T C = 10 + 10Q - 4Q2 + Q3, (6)where Q is the number of units of output produced.
(a) Find the total variable cost T V C and total fixed cost T F C
(b) Derive the average variable cost AV C
(c) Derive the marginal cost MC
(d) What is the output level where average variable cost is minimum?
(e) What is the output level where average variable cost equals marginal cost?
Explain the relationship between the MC curve and the AVC and ATC curves.
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