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Homework answers / question archive / The short run total cost of a firm is given by: SRTC en e +4q+ 432K where k is fixed

The short run total cost of a firm is given by: SRTC en e +4q+ 432K where k is fixed

Economics

The short run total cost of a firm is given by: SRTC en e +4q+ 432K where k is fixed. Suppose that the firm wants to produce q=36. The economically efficient level of Kis:

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By substituting the different value of k, ATC can be found as below to get minimum ATC which represents the most efficient level of output and the value of k is 3.

k

q

SRTC

ATC = SRTC/q

1

36

4464.00

124.00

2

36

2952.00

82.00

3

36

2736.00

76.00

4

36

2844.00

79.00

5

36

3081.60

85.60

6

36

3384.00

94.00

7

36

3723.43

103.43

8

36

4086.00

113.50

9

36

4464.00

124.00

10

36

4852.80

134.80

11

36

5249.45

145.82

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