Question
For a firm with Total Cost function TC = 100 + 6Q + 2Q², which of the following statements is CORRECT? (
- I MC = AC at the minimum of AC (I
- I The minimum of AC occurs at Q = 5 (II
- I At Q = 5, MC = AC = 26 (I
- V The fixed cost does not affect the MC but shifts the AC curve upward
Minimum AC: Set dAC/dQ = 0 ⇒ −100/Q² + 2 = 0 ⇒ Q = √50 ≈ 7.07 (NOT Q = 5). ∴ Statement II is FALSE. At Q = √50: AC = MC = 6 + 20√2 ≈ 34.28 (NOT 26). ∴ Statement III is FALSE. Statements I (✔) and IV (✔) are correct. Answer: (A).More Research Questions
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