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An economist estimated that the cost function of single-product firm is C(Q) = 100 + 20Q + 15Q^2...

Question:

An economist estimated that the cost function of single-product firm is {eq}C(Q) = 100 + 20Q + 15Q^2 + 10Q^3 {/eq}, where Q is the quantity of output. Calculate the average fixed cost of producing 10 units of output.

Cost:

In economics, the cost is the price paid by a firm to produce its final output for the market. This final output is sold in the market to earn a positive profit and continue business operations.

Answer and Explanation: 1

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We know that the fixed cost is the cost that a firm has to incur irrespective of its level of output. In this case, the fixed cost is 100. Now, the...

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Fixed Costs: Definition, Formula & Examples

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Chapter 3 / Lesson 14
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What is a fixed cost? Learn the fixed cost definition and how to calculate it using the fixed cost formula. Compare fixed vs. variable costs and see fixed costs examples in business.


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