Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's average cost function?
A. AC = (50,000/Q) + 50 + 0.005Q
B. AC = (20,000/Q) + 30 + 0.005Q
C. AC = (50,000/Q) + 30 + 0.0025Q
D. AC = 50,000 + 30Q + 0.0025Q2
C. AC = (50,000/Q) + 30 + 0.0025Q
You might also like to view...
Which of the following leads to the demanders paying all of a tax?
A) The supply is unit elastic. B) The supply is perfectly inelastic. C) The demand is perfectly elastic. D) The demand is perfectly inelastic.
Assume the United States and Canada have the same amount of resources. In a given time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada can produce 4 tons of steel or 400 tons of wheat. This means that
A. The United States has a comparative advantage in steel. B. Canada has an absolute advantage in both steel and wheat. C. Canada has a comparative advantage in steel. D. The United States has an absolute advantage in steel.