Which form of cost functions (i.e. linear quadratic or cubic) this company seems to have?.
Question 1(The Theory of Cost) 1. The economist for the Grand Corporation has estimated the company Show more Question 1(The Theory of Cost) 1. The economist for the Grand Corporation has estimated the companys cost function using time series data to be TC = 50 + 16Q 2Q2 + 0.2Q3 Where Q = Quantity of output produced per period and TC = total cost. a. Fill in the table below by calculating TFC TVC TC AFC AVC ATC and MC for Q = 1 to 10. Total Fixed Cost (TFC) Total Variable Cost (TVC) Total Cost (TC) Average Fixed Cost (AFC) Average Average Marginal Cost (MC) Total Fixed Cost (TFC) Total Variable Cost (TVC) Total Cost (TC) Average Fixed Cost (AFC) Variable Cost (AVC) Total Cost (ATC) Marginal Cost (MC) Quantity Total Fixed Cost (TFC) Total Variable Cost (TVC) Total Cost (TC) Average Fixed Cost (AFC) Marginal Cost (MC) 0 1 2 3 4 5 6 7 8 9 10 b. Plot TC TVC and TFC curves for Q = 1 to 10 on a graph. c. Plot ATC AVC and MC curves for Q = 1 to 10 on another graph. d. Which form of cost functions (i.e. linear quadratic or cubic) this company seems to have? Discuss your results in terms of decreasing constant and increasing MC Show less
Which form of cost functions (i.e. linear quadratic or cubic) this company seems to have?
