assume that a firm is operating in a market which is perfectly competitive and and the firm in this market has the following total cost and marginal cost functions TC= 500+ 0

Economics Aug 22, 2020

assume that a firm is operating in a market which is perfectly competitive and and the firm in this market has the following total cost and marginal cost functions

TC= 500+ 0.1q2

MC= 0.2q

write equations for firms average total cost, average variable cost and average fixed cost

Expert Solution

Given,

TC= 500+ 0.1q2

MC= 0.2q

Average Total Cost (ATC) = TC /q

= 500+ 0.1q2/q

ATC = 500/q + 0.1 q

Average Variable Cost (AVC) = 0.1q2/q = 0.1 q

Average Fixed Cost (AFC) = 500q/q

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