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# Cost Curve Anaylsis

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You have been presented with the following cost data table and asked to fit a statistical cost function.
Quantity | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | 90 | 100
Total Cost | 104 | 107 | 109 | 111.5 | 114.5 | 118 | 123 | 128.5 | 137 | 150

Question 1: fit (estimate) three possible statistical cost functions to the data. Use straight-line, quadratic, and cubic formulas.

2: discuss the statistical results you obtained in question 1. Include in your discussion R^2 , the coefficients, and the statistical significance of the coefficients. For the statistical significance test, use the p-test rather than the t-test.

3: If the data represent 10 months of production for one plant of a specific company, would you consider this to be a short-run analysis?

4: how would you answer to question 3 change if you were told that the data represent 10 different plants during a particular month of the year?

##### Solution Summary

The solution assists with fitting a statistical cost function to the data.

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