b) Obtain the monopolist’s average total cost function, average variable cost function,and marginal cost function
Question
b) Obtain the monopolist’s average total cost function, average variable cost function, and marginal cost function
Solution
To obtain the monopolist's average total cost function, average variable cost function, and marginal cost function, we first need to know the total cost (TC), total variable cost (TVC), and total fixed cost (TFC) functions.
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Average Total Cost (ATC): The average total cost is calculated by dividing the total cost (TC) by the quantity (Q) of output produced. It is represented as ATC = TC/Q.
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Average Variable Cost (AVC): The average variable cost is calculated by dividing the total variable cost (TVC) by the quantity (Q) of output produced. It is represented as AVC = TVC/Q.
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Marginal Cost (MC): The marginal cost is the cost of producing one more unit of a good. It can be obtained by taking the first derivative of the total cost function with respect to quantity. It is represented as MC = d(TC)/dQ.
Without the specific cost functions, I can't provide the exact forms of ATC, AVC, and MC. However, these are the general formulas you would use to calculate them.
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