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For each cost function in Figure 4.62, is there a value of q at which average cost is
Chapter 4, Problem 1(choose chapter or problem)
QUESTION:
For each cost function in Figure 4.62, is there a value of q at which average cost is minimized? If so, approximately where? Explain your answer.
Questions & Answers
QUESTION:
For each cost function in Figure 4.62, is there a value of q at which average cost is minimized? If so, approximately where? Explain your answer.
ANSWER:Step 1 of 4
(a)
Consider the below graph of the function.
Step 2 of 4
From the graph the graph is concave down; the average cost gets smaller as quantity increases.
The cost per item gets smaller as quantity increases.
The average cost at q is the slope of the line going through the origin and the point (q, C(q)).