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A competitive firm estimates its average variable cost function to be

Question # 00183033
Subject: Economics
Due on: 01/30/2016
Posted On: 01/30/2016 11:07 AM

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A competitive firm estimates its average variable cost function to be

AVC = 125 - 0.21Q + 0.0007Q2 .

The firm's total fixed cost is $3,500.)
-At what level of output does the AVC reach its minimum? What is the AVC at this output level?
-Suppose the price of the product is P = $125. Determine the profit maximizing level of output? Compute the firm’s profit. If the firm is losing money, should it produce? Explain.

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A competitive firm estimates its average variable cost function to be

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Tutorial Preview …(d/dQ)(AVC) x -0 xx + 0 xxxxx For AVC xx be xxxxxxxx xxxxxxxxxxx = x -0 21 x 0 0014Q x 0 x x 0 xxxx 0014 = xxx AVC when x = xxx xx 125 xxx 0 21(150) x…
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