3. A firm has two plants that produce identical output. The cost functions are C1₁ = 20q-8q² + 2q³ and C₂ = 20q - 4q² + 2q³. a. At what output level does the average cost curve of each plant reach its minimum? b. If the firm wants to produce four units of output, how much should it produce ineach plant?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
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Problem 40P: Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from...
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13. A firm has two plants that produce identical output. The cost functions are
C₁1 20q8q² + 2q³ and C2 = 20q - 4q² +
=
2q³.
a. At what output level does the average cost curve of each plant reach its
minimum?
b.
If the firm wants to produce four units of output, how much should it produce
ineach plant?
Transcribed Image Text:13. A firm has two plants that produce identical output. The cost functions are C₁1 20q8q² + 2q³ and C2 = 20q - 4q² + = 2q³. a. At what output level does the average cost curve of each plant reach its minimum? b. If the firm wants to produce four units of output, how much should it produce ineach plant?
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