Determine the short-run average variable cost

Assignment Help Financial Accounting

Reference no: EM13148248

A study of the costs of electricity generation for a sample of 56 British firms in 1946–1947 yielded the following long-run cost function:16 AVC = 1.24 + .0033Q + .0000029Q2 ? .000046QZ ? .026Z + .00018Z2 where AVC = average variable cost (i.e., working costs of generation), measured in pence per kilowatt-hour (kWh). (A pence was a British monetary unit equal, at that time, to 2 cents U.S.) Q = output; measured in millions of kWh per year Z = plant size; measured in thousands of kilowatts a. Determine the long-run variable cost function for electricity generation. b. Determine the long-run marginal cost function for electricity generation. c. Holding plant size constant at 150,000 kilowatts, determine the short-run average variable cost and marginal cost functions for electricity generation. d. For a plant size equal to 150,000 kilowatts, determine the output level that minimizes short-run average variable costs. e. Determine the short-run average variable cost and marginal cost at the out- put level obtained in Part (d).

Reference no: EM13148248

Questions Cloud

Establish interval estimate around sample mean : Find the standard error of mean. Also establish an interval estimate around the sample mean using one standard deviation of the mean.

How your proposal ultimately maximizes profits : From the first e-Activity, propose a short-term and long-term pricing strategy for the product or service you researched including how the strategies would be implemented. Assess how your proposal ultimately maximizes profits.

What is the empirical formula of this compound : a student heated a .546 gram pure chemical in an atmosphere of oxygen gas until it had completely reacted the final chrominum compound weighed .798 grams what is the empirical formula of this compound?

What are the hard-and-fast rules of science : Why you think scientists probably want to leave what they do open to revision.

Determine the short-run average variable cost : Determine the short-run average variable cost and marginal cost at the out- put level obtained in Part (d).

Find large-sampleconfidence interval for difference : Commercial A was selected by 45 out of 100 women and 80 out of 140 men. A large-sample 95% confidence interval for this difference is?

Should supermarkets no longer spray the produce : in the supermarket, produce is often sprayed with water. Explain why this makes vegetables look crisp. Is this a true representation of the freshness of produce? Should supermarkets no longer spray the produce?

Net realizable value of receivables-financial statements : The practice of reporting the net realizable value of receivables in the financial statements is commonly called:

Determine what happens to the amount spent on x as the price : None of the above is necessarily true, because the information provided does not allow us to determine what happens to the amount spent on X as the price of X falls.

User Account

All Pages