I needed help with the analysis in the attached and also the forumlas/theories behind the concepts user.
(a) Based on this information, will the graph of this firm's average and marginal cost function look like figure 8.1(e)?
TC(X) is quadratic function and MC is linear;
AC(X) = 10,000,000/X + 50 + X/16000, which is convex.
Therefore, Figure 8.4 shows the graph of the cost functions.
(b) The firm's AC function is:
AC(X) = 10,000,000/X + 50 + X/16000
Set AC = MC, or
10,000,000/X + 50 + X/16000 = 50 + X/8000
10,000,000/X = X / ...
Average marginal cost function is applied.