A Short-Run Marginal Cost Function Is Estimated As $S M C = 96 - 4 Q + 0.15 Q ^ { 2 }$

question 3

Multiple Choice

A short-run marginal cost function is estimated as $S M C = 96 - 4 Q + 0.15 Q ^ { 2 }$ . Which of the following cost functions is associated with this estimated SMC equation?

• A) TVC = 96Q - 2Q² + 0.05Q³
• B) SMC = 96 - 4Q + 0.1Q²
• C) TVC = 96Q + 4Q² + 0.15Q³
• D) AVC = 96 - 2Q + 0.05Q²
• E) a and d

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; this can include payments on loans, bonds, or lines of credit.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Book Value

The net value of a company's assets minus its liabilities, often used to assess a company's financial health.

Capital

Financial assets or the financial value of assets, such as cash, used by a company to fuel its business operations.