Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / A firm has a fixed production cost of $20,000 and a constant marginal cost of production of $900 per unit produced
A firm has a fixed production cost of $20,000 and a constant marginal cost of production of $900 per unit produced. What is the firm's total cost function?
A. TC = 20,000 + (900q).
B. TC = 900q.
C. TC = 20,000.
D. TC = 20,000+(900q)q20,000+(900q)q.
The total cost function is the sum of the total fixed costs and total variable costs of the production of the good or service. The total fixed costs are $20,000 which is already given in the problem. Additionally, since the additional cost of producing one more unit is constant, the total variable cost will be 900 multiplied by the quantity (900q). Therefore, the correct answer is option A.
Option B. is incorrect because that function only shows the variable costs. Option C. is also incorrect because it only shows the fixed costs. Option D. is incorrect because that equation shows the average cost of production.
