Linear Total Cost Function
A linear cost function has the form: TC = a + bQ
Where TC is the total cost, Q the output level, a the fixed cost and b the marginal rate of change in cost when output changes. Fig 6.8(a) shows a linear TC function. The average or unit cost function can be obtained by dividing the total cost function by output. That is,
ATC = TC/Q = a+b/Q
The shape of average or unit cost function is shown in fig. 6.8 (b). At zero output level the total cost comprises total fixed cost that includes depreciation, insurance, and property taxes. In case of a linear function, average variable cost equals b (=ATC - a/Q), and marginal cost also equals b.
Managerial Economics Tutoring - Assignment Help
Our online managerial economics experts are here for your help. Expertsmind.com online assignment help-homework help brings you high grade in your courses and examination, We at Expertsmind.com offers managerial economics assignment help, managerial economics homework help and projects help. We offer complete package of managerial economics online tutoring for 24x7 hours.
ExpertsMind.com - Linear Total Cost Function Assignment Help, Linear Total Cost Function Homework Help, Linear Total Cost Function Assignment Tutors, Linear Total Cost Function Solutions, Linear Total Cost Function Answers, Forms of Cost Functions Assignment Tutors