Explore BrainMass
Share

Explore BrainMass

    Average Cost Minimization

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

    Average Cost Minimization. Better Buys, Inc., is a leading discount retailer of wide-screen digital and cable-ready plasma HDTVs. Revenue and cost relations for a popular 55-inch model are:

    TR = $4,500Q ï?­ $0.1Q2

    MR = �TR/�Q = $4,500 � $0.2Q

    TC = $2,000,000 + $1,500Q + $0.5Q2

    MC = �TC/�Q = $1,500 + $1Q

    A. Calculate output, marginal cost, average cost, price, and profit at the average cost-minimizing activity level.
    B. Calculate these values at the profit-maximizing activity level.
    C. Compare and discuss your answers to parts A and B.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:00 am ad1c9bdddf
    https://brainmass.com/economics/output-and-costs/358370

    Solution Summary

    The solution provides the necessary cost calculations.

    $2.19