# Average marginal cost function

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Please help with the analysis in the attached and also the formulas/theories behind the concepts user.

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#### Solution Preview

See the attached file.

(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 + ...

#### Solution Summary

Average marginal cost function is applied and the details are presented in the solution.

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