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DRQ #3 Capps - Fall 2011 3 pts September 13, 2011

DRQ #3 Capps - Fall 2011 3 pts September 13, 2011. Suppose that for BECAD, Inc., you find that AVC = 12 - 0.4Q + 0.04Q 2. (1 pt) (a) What is the level of Q which will minimize AVC? (1/2 pt ) (b) What is the minimum AVC?

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DRQ #3 Capps - Fall 2011 3 pts September 13, 2011

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  1. DRQ #3 Capps - Fall 2011 3 pts September 13, 2011 Suppose that for BECAD, Inc., you find that AVC = 12 - 0.4Q + 0.04Q2. (1 pt) (a) What is the level of Q which will minimize AVC? (1/2 pt) (b) What is the minimum AVC? (1/2 pt) (c) What is the technical name of this minimum value for BECAD, Inc.? 2. Suppose that Q = 8,000 – 400P. (1/2pt) (a) Derive the inverse demand curve. (1/2 pt) (b) Obtain the marginal effect associated with P.

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