A company has the following cost function: C(q) = 4q3 - 200q2 + 500q + 50,000. a. What level of...

Question:

A company has the following cost function: {eq}C(q) = 4q^3 - 200q^2 + 500q + 50,000 {/eq}.

a. What level of output will minimize the average variable cost?

b. Does the production process indicate diminishing marginal product? How can you tell?

Production of Output

The production of output depends on the level of inputs and the prices of inputs. Technology also plays an important role in defining the efficiency of the production process.

Answer and Explanation: 1

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Given the cost function:-

{eq}C\left( q \right) = 4{q^3} - 200{q^2} + 500q + 50000 {/eq}

Part a

The average variable cost is at its minimum when...

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Production Function in Economics: Definition, Formula & Example

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Chapter 11 / Lesson 27
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Learn about the production function. Read the production function definition in economics, learn the production function formula. Plus, see graphs and examples.


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