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    Short, Run, Average, Variable, Costs

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    Study of 60 firms

    AVC = 1.24 + .0033Q + .0000030Q^2 - .000045QZ + .00020Z^2

    Q Output
    Z Plant Size

    If Z = 150;

    1. Determine the short run average variable cost and the marginal cost functions.

    2. Determine the output level that minimizes short run average variable costs

    3. Determine the SRAVC and marginal cost at the output level in 2

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    https://brainmass.com/economics/output-and-costs/short-run-average-variable-costs-36112

    Solution Preview

    Part 1:
    AVC = 1.24 + .0033Q + .0000030Q^2 - .000045QZ + .00020Z^2
    For Z=150, substitute value of Z in the equation.

    AVC = 1.24 + .0033Q + .0000030Q^2 - .000045Q*150 + .00020*150^2
    AVC= 5.74 - .00345Q + .0000030Q^2

    Total Variable Cost = AVC*Q=5.74Q - ...

    Solution Summary

    Determine the SRAVC and marginal cost at the output level in 2

    $2.49

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