Cubic Total Cost Function Assignment Help

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Cubic Total Cost Function

The U-shape of average cost function assumes the cubic total cost function. A cubic cost function is written as

TC = a + bQ - cQ2 + dQ3

          Therefore

        ATC= a/Q + b - cQ + dQ3

The total cost function of a cubic form shall have two bends as it combines both increasing and decreasing returns or productivity as shown in Fig. 

340_Cubic Cost Function.png

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