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Finding Minimum AVC and MC

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The Dijon Company's total variable cost function is:

TVC = 50Q -10Q^2 + Q^3

where Q is the number of units of output produced.

a. What is the output level where marginal cost is at minimum?
b. What is output level where average variable cost is a minimum?
c. What is the value of average variable cost and marginal cost at the output specified in the answer to part b?

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Solution Summary

Solution describes the steps for calculating output levels where MC and AVC assume minimum value. Minimum values for MC and AVC are also calculated.

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Solution:

a. What is the output level where marginal cost is at minimum?
TVC=(50Q -10Q^2 + Q^3)

Marginal Cost, MC=d(TVC)/dQ=50-20Q+3Q^2
d(MC)/dQ = ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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