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    Average marginal cost function

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    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.