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Refer to the Following:
a Consulting Company Estimated Market Demand Qd=25,0005,000P+25M\mathrm { Q } _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M

question 86

Multiple Choice

Refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
Qd=25,0005,000P+25M\mathrm { Q } _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M
Q5=240,000+5,000P2,000PIQ _ { 5 } = 240,000 + 5,000 P - 2,000 P _ { I }
where P is price, M is income, and
PIP _ { I } is the price of a key input. The forecasts for the next year are
M^\hat { M } = $15,000 and
P^I\hat { P } _ { I } = $20. Average variable cost is estimated to be
AVC=140.008Q+0.000002Q2A V C = 14 - 0.008 Q + 0.000002 Q ^ { 2 }
Total fixed cost will be $6,000 next year.
-What is the firm's minimum average variable cost?


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