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Optimal output level by marginal cost minimization

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A firm has determined that its variable costs are given by the following relationship:

VC = .05Q3 - 5Q2 + 500Q
where Q is the quantity of output produced.

Determine the output level where marginal costs are minimized.

333.3

33.3

3.33

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Solution Summary

First order derivative approach used to derive optimal quantity by minimizing marginal cost function

Solution Preview

VC = .05Q3 - 5Q2 + 500Q , marginal cost is the incremental change in variable cost

Marginal cost function is obtained by ...

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