Question: An economist estimated that the cost function of a single product is firm has the following short-run total cost function:

TC = 50 + 25Q –30Q²+ 5Q³

Based on this information, determine:

a. Write the equation for marginal cost (MC), average variable cost (AVC), and average total cost (ATC)

b. What level of output will minimize the MC and the AVC?

c. Draw (sketch) the graph of AVC and MC and explain why both are u-shaped.

d. How do managers use the ATC, AVC, and MC information in business decisions?