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:

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

...Find the quantity that is the most efficient operating point for the firm. ... for the firm is where ATC is at its minimum,so in ... ATC = AFC+AVC AFC is always falling ...

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... the AFC curve does is shift the minimum slightly to ... no relationship between the [MC, VC and the AVC] and the ... down point and when a firm might find it necessary ...

... calculate profit maximizing level of output, and find loss in ... (Hint: use the concept of "Minimum efficient scale ... and MC is constant so that ATC = AVC =MC = $20 ...

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... cost function looks like C= 200+2q2 A. find equations for ... ATC = C / q = 200/q + 2q AVC = 2q^2 / q = 2q ... Is there a minimum level of price below which Anita will ...

... Since Price ($115) is greater than Minimum AVC, firm should continue ... d.The manager of EverKleen finds two output levels ... can be obtained by putting P=MC 115=125 ...

... You can again set P =MC and find optimal output and check if the size of the loss is greater than TFC. ... b. AVC reaches its minimum at __150____ units of ...