Suppose a firm's total cost function is given by TC = 6,000 + 2Q + 0.25Q², where MC = 2 + 0.5Q. The output level that minimizes average total cost is ____. A) 154.9 B) 175 C) 150 D) 0

Name: Suppose a firm's total cost function is given by TC = 6,000 + 2Q + 0.25Q 2 , where MC = 2 + 0.5Q. The output level that minimizes average total cost is ____. A) 154.9 B) 175 C) 150 D) 0
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Quizplus · Accepted Answer

ATC is minimized when MC = ATC. So, 2 + 0.5Q = 6,000/Q + 2 + 0.25Q. Solving for Q gives Q = 154.9.

Suppose a Firm's Total Cost Function Is Given by TC