The following questions refer to a firm, whose manager recently estimated its average variable cost (AVC) function to be
AVC = 88 - 0.026Q + 0.000003Q2
The firm faces total fixed costs (TFC) of $300,000.
a. What is the marginal cost of the firm equal to (in dollar terms) when output is 6,000 units?
b. What is the firm's total cost equal to when output is 6,000 units?
TVC = AVC * Q = (88 - 0.026Q + 0.000003Q^2) * Q = 88Q - 0.026Q^2 + 0.000003Q^3
TFC = 300000
TC = TVC + TFC = ...
Complete, Neat and Step-by-step Solutions are provided.