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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

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

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