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

question 33

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 average total cost (ATC) ?

• A) $121.93
• B) $171.40
• C) $463.20
• D) $1,348

---

Definitions:

Technical Education

Educational programs focused on the skills and knowledge required for specific trades or professions, often involving practical training.

SwarmBots

Autonomous robots designed to work together in large numbers to accomplish tasks, mimicking the behavior of insects like ants or bees.

Ants

Small social insects that live in highly organized colonies and are found almost everywhere on Earth.

Seventy-second Birthday

The celebration marking the 72nd anniversary of a person's birth.