Different cost calculations of cost equation

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Reference no: EM1311344

Suppose you hire a furloughed Wall Street analyst to help you analyze your production process, and she uses your historical cost records to estimate that your total cost function is C(Q) = 100 + 2Q + 3.5Q2. Using this equation, answer the following and show your logic and calculations.

a. How much is your firm's profit or loss at an output of zero? Explain.

b. With the above cost equation, average total costs (ATC), first decline as output increases, and then begin to rise. Assuming output occurs in whole units, i.e. 1, 2, 3,... at what output does the low point of ATC occur and what is the ATC at that output? Show your calculations.

c. What is the total cost of an output of 500?

d. What is the Average Variable Cost (AVC) at a production level of 10?

Reference no: EM1311344

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