Find the output level that minimizes average total cost

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Reference no: EM131393479

Suppose a firm’s total cost curve can be represented as TC = 15Q2 +8Q + 45 and that marginal cost can be represented by 30Q + 8.

a. What is this firm’s total fixed cost?

b. Write an equation for this firm’s variable cost, average variable cost, and average total cost. (Reduce the functions as much as possible)

c. Find the output level that minimizes average total cost.

d. Assume your firm was going to produce at the output level found in “c” what would be the total production cost?

e. Finally assume that the price you would receive for this product at this production amount is $50 per unit. Would your company continue production? Why or why not? Justify your answer.

Reference no: EM131393479

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