An economist estimated that the cost function of a single-product firm is: C( Q

Question

An economist estimated that the cost function of a single-product firm is:

C(Q) = 110 + 20Q + 30Q2 + 10Q3.

Based on this information, determine the following:

a. The fixed cost of producing 10 units of output.

$

b. The variable cost of producing 10 units of output.

$

c. The total cost of producing 10 units of output.

$

d. The average fixed cost of producing 10 units of output.

$

e. The average variable cost of producing 10 units of output.

$

f. The average total cost of producing 10 units of output.

$

g. The marginal cost when Q = 10.

$

Explanation / Answer

a. 110
b. plug in Q=10 and subtract 110=13200
c. plug in Q=10 =13310
d. answer to a, divided by 10 =11
e. answer to b, divided by 10 =1320
f. answer to c, divided by 10 =1331
g. (take derivative C'(Q), plug in Q=10) =3820

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