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Could someone assist me with this exercise ?

ChrisM
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10/6/2016 2:16:23 AM
Posted: 2 months ago
I have this exercise: TC ( total costs ) of a firm in a perfect competitive market are C(q)= q.q+2q+16. Market price is 8. What are marginal cost, average fixed cost, average variable cost , average total cost ? Is it possible how exactly to solve this ?
DisKamper
Posts: 63
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10/6/2016 4:01:36 AM
Posted: 2 months ago
At 10/6/2016 2:16:23 AM, ChrisM wrote:
I have this exercise: TC ( total costs ) of a firm in a perfect competitive market are C(q)= q.q+2q+16. Market price is 8. What are marginal cost, average fixed cost, average variable cost , average total cost ? Is it possible how exactly to solve this ?

This is pretty easy if you look at the definitions of marginal cost, average fixed cost, average variable cost and average total cost. All of these costs are in units of currency per unit.

Marginal cost is the derivative of total cost with respect to q.

Average total cost is the total cost divided by q.

Average variable cost is the integral of marginal cost from 0 to q divided by q.

Average fixed cost is average total cost minus average fixed cost.