Examples of cost function - Economics

Examples of cost function

1) Total cost: T C(q) = 10 + 10q

Marginal cost: M C(q) =

Average cost: AC(q) =

dT C(q)

dq

T C(q)

q

=

= 10

10+q+q 2

q

where AV C(q) = 10 and AF C(q) =

10

q

+ 10

12

14

=

10

q

14

12

10

8

6

4

2

0

2

4

6

8

10

q

2) Total cost: T C(q) = 10 + q + q 2

Marginal cost: M C(q) =

Average cost: AC(q) =

dT C(q)

dq

T C(q)

q

=

= 1 + 2q

10+q+q 2

q

where AV C(q) = 1 + q and AF C(q) =

1

=

10

q

10

q

+1+q

16

18

20

14

12

10

8

6

4

2

0

2

4

q6

8

3) Total cost: T C(q) = 10 + 10q ? 4q 2 + q 3

C(q)

Marginal cost: M C(q) = dTdq

= 10 ? 8q + 3q 2

10+10q?4q 2 +q 3

q

=

where AV C(q) = 10 ? 4q + q 2 and AF C(q) =

10

q

Average cost: AC(q) =

T C(q)

q

=

10

10

q

12

+ 10 ? 4q + q 2

14

12

10

8

6

4

2

0

1

2

q

2

3

4

5

4) Total cost: T C(q) = 10 + 10q 2

dT C(q)

= 20q

dq

2

Average cost: AC(q) = T C(q)

= 10+10q

q

q

where AV C(q) = 10q and AF C(q) = 10

q

Marginal cost: M C(q) =

=

10

q

+ 10q

40

30

20

10

0

1

2

q

3

3

4

5

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