Refer to the Cost Regression for Straker Industries Shown Below $$A V C = a + b Q + c Q ^ { 2 }$$

question 18

Multiple Choice

Refer to the cost regression for Straker Industries shown below.
Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form

$$A V C = a + b Q + c Q ^ { 2 }$$
and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000.
$$\begin{array} { r l l l l l } \text { DEPENDENTVARIAELE: } & \text { AVC } & \text { R-SQUARE } & \text { F-RATIO } & \text { P-VALUE ON F } \\\text { OESERVATIONS: } & \text { 35 } & \mathbf { 0 . 8 7 1 3 } & 108.3 & \mathbf { 0 . 0 0 0 1 } & \\& & \begin{array} { l } \text { PARAMETER }\end{array} & \text { STANDARD } & & \\\text { VARIAELE } & & \text { ESTIMATE } & \text { ERROR } & \text { T-RATIO } & \text { P-VALUE } \\\text { INTERCEPT } & & 43.40 & 13.80 & \mathbf { 3 . 1 4 } & \mathbf { 0 . 0 0 3 6 } \\\text { Q } & & - \mathbf { 2 . 8 0 } & \mathbf { 0 . 9 0 } & - \mathbf { 3 . 1 1 } & \mathbf { 0 . 0 0 3 9 } \\\text { Q2 } & & \mathbf { 0 . 2 0 } & \mathbf { 0 . 0 5 } & 4.00 & \mathbf { 0 . 0 0 0 4 }\end{array}$$
-If Straker Industries produces 12 units of output, what is estimated total cost (TC) ?

• A) $1,000
• B) $1,463.20
• C) $2,348
• D) $4,428

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Definitions:

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The process of extracting useful patterns, correlations, and insights from large sets of data using statistical and machine learning techniques.

Salary Differentials

The variations in salary for similar jobs within the same sector or across different sectors, often influenced by geographical location, experience, education level, and the nature of the work.

Competitiveness

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