Statistics Solutions

(Steps Shown) A firm estimated its short-run costs using an average variable cost function of the form AVC=a+bQ+cQ^2 and obtained the following results. Total

Question: A firm estimated its short-run costs using an average variable cost function of the form

\[AVC=a+bQ+c{{Q}^{2}}\]

and obtained the following results. Total fixed cost is $1,000.

DEPENDENT VARIABLE: AVC R SQUARE F RATIO P VALUE ON F
OBSERVATIONS: 35 0.8713 108.3 0.0001
VARIABLE PARAMETER
ESTIMATE 		STANDARD
ERROR 		TRATIO PVALUE
INTERCEPT 43.40 13.80 3.14 0.0036
Q 2.80 0.90 3.11 0.0039
Q2 0.20 0.05 4.00 0.0004
  1. At what level of output is AVC minimum? What is the minimum AVC?
  2. What are the estimated AVC and TC when the firm produces 20 units of output?
  3. What is estimated MC when the firm produces 12 units of output?

Price: $2.99
Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document


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