Explore BrainMass
Share

minimum average cost

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

The total cost of producing Q units of a commodity is:

C(Q) = 4Q^2 + 40Q + 36 Q > 0

Show that the Q that minimizes the average cost A(Q) also is the Q where the marginal cost is equal to the average cost.

© BrainMass Inc. brainmass.com October 25, 2018, 5:35 am ad1c9bdddf
https://brainmass.com/economics/macroeconomics/minimizing-average-cost-426149

Solution Preview

Please refer to attachment for proper formatting.

Answer:
Given that,
C(Q)=4Q^2+40Q+36
Or,
Average ...

Solution Summary

This solution clarifies minimizing average cost.

$2.19
See Also This Related BrainMass Solution

Toyota - Raising Funds to Meet Recall Cash Requirements

Toyota Motor Corp, the world's second largest auto maker, has a big problem. At the end of May, 2006 the company announced a recall affecting roughly one million of its vehicles world wide. The problem has to with the steering mechanism of the affected vehicles that could fail under pressure and cause drivers to lose control. Toyota has refused to disclose the full cost of this recall.

Further financial information and news releases about Toyota can be found on their web site or go to finance.Yahoo.com and then click in succession on the headings: finance, industries, auto manufacturers, Toyota Motor, key statistics, balance sheet, Annual Data
Make the following assumptions. Toyota will need approximately $925 million in order to take care of the full cost of this recall. This sum needs to be raised so that the company has this additional cash to support the manufacturing of the new parts, their global distribution, the dealers' costs of contacting the affected customers and then making the replacement plus the public relations and advertising campaigns needed to stress the reliability and safety of Toyota vehicles.

You should also assume that the current cash, accounts receivables and other current assets (all listed in the Balance Sheet) are all committed to current operations.

As a senior financial manager, I need to recommend the best sources for this $925 million in a five page paper. Be specific on the amount to be raised from each source and justify both your selection of each source as well as the amount you intend to raise from this source. Do not overlook the issue of debt/equity balancing.

View Full Posting Details