Estimate the company cost function

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Reference no: EM133129670

The Big Horn Corporation commissioned an economics consultant to estimate the company's cost function. The consultant collected a large amount of data for several years from the corporation's books, and came up with the following equation:

CT =170 + 22Q + 1.5Q2

Where: CT (Total Cost in Miles)

Q= quantity produced per period

a. Draw this curve for amounts from 1 to 15

b. Compute the average total cost, average variable cost, and marginal cost, and plot them on another graph.

c. Discuss your results in terms of increasing, constant, and decreasing marginal costs. Does Big Horn's cost function illustrate all of this?

Reference no: EM133129670

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