Please help with the following problems.
Suppose that the economist of Corporation XYZ estimates the following long run cost function for a product M that the company produces and sells.
TC = 5Q2 + 10Q +180
The market price for product M is fixed at P = $70
a. What is the total fixed cost?
b. What is the total variable cost function?
c. Suppose that Company XYZ would like to minimize average total cost. What volume of output of product M should be produced?
d. At P = $70, calculate whether the firm has economic profits, economic loss or normal profits. Explain why.
a. Total fixed cost is 180 (remember that fixed cost does not change with respective to quantity, and this is the only term in the cost function that is independent of Q)
b. Total ...
This solution helps answer questions regarding managerial economics. It helps calculate total fixed cost, find a total variable cost function, find the volume of output produced, and calculate whether a firm has economic profits, economic loss or normal profits.