Purchase Solution

Characteristics of cost functions: fixed, variable, average and marginal

Not what you're looking for?

Ask Custom Question

Consider the following variable cost function (where Q = output):
VC = 200 * Q - 9 * Q^2 + 0.25 * Q^3
Fixed costs are equal to $150: FC = 150

A. Determine the total cost function.
B. Determine the (i) average fixed, (ii) average variable, (iii) average total, and (iv) marginal cost functions.
C. Determine the value of Q where the marginal cost function takes on its minimum value.

Purchase this Solution

Solution Summary

This solution analyzes the characteristics of cost functions: fixed, variable, average and marginal

Solution Preview

A. The total cost function is made up of fixed costs + variable costs. Based on the information provided above: TC (total cost) = FC + VC
TC = 150 + 200 * Q - 9 * Q^2 + 0.25 * Q^3

Average fixed = fixed cost per ...

Purchase this Solution

Free BrainMass Quizzes
Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.


This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Learning Lean

This quiz will help you understand the basic concepts of Lean.