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Average marginal cost function

Hi There,

I needed help with the analysis in the attached and also the forumlas/theories behind the concepts user.


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(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 / ...

Solution Summary

Average marginal cost function is applied.