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Ahmad has a total cost function for his furniture factory as follows: TC = 100 + 8Q - 0.12Q2 + 0.004Q3
a. Show that the ATC, AVC, MC, and AFC equations
b. At what level of output do diminishing returns set in?
c. At what level is AVC minimum?
d. At what output level are MC and AVC equal?
e. Why does AVC reach a minimum before ATC reaches a minimum?
f. At the point where the ATC is at minimum, the marginal product of labour is 12 and the marginal product of capital is 18. If the price of labour per hour is RM8, what is the price of capital per hour?
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