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The economist for the Grand Corporation has estimated the company’s cost function using time series data to be TC 50 16Q 2Q2 0.2Q3 where TC Total cost Q Quantity produced per period


The economist for the Grand Corporation has estimated the company’s cost function, using time series data, to be

TC = 50 + 16Q – 2Q2 + 0.2Q3

where TC = Total cost

Q = Quantity produced per period

a. Plot this curve for quantities 1 to 10.

b. Calculate the average total cost, average variable cost, and marginal cost lor these quantities, and plot them on another graph.

c. Discuss your results is in terms of decreasing, constant, and increasing marginal costs. Does Grand’s cost function illustrate all these?

May 02 2020 View more View Less

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