Suppose a Firm's Total Cost Function Is Given by TC

question 66

Multiple Choice

Suppose a firm's total cost function is given by TC = 6,000 + 2Q + 0.25Q², where MC = 2 + 0.5Q. The output level that minimizes total cost is ____.

• A) 154.9
• B) 175
• C) 150
• D) 0

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Definitions:

Utility

The satisfaction or benefit derived by consumers from consuming goods and services.

Opportunity Cost

The potential benefit that is missed out on when choosing one alternative over another.

Production Possibilities

Production possibilities refer to the different combinations of goods and services that an economy can produce given its available resources and technology, illustrated by the production possibilities frontier (PPF).

Consumer Goods

Products and services that are consumed by individuals or households to satisfy their immediate needs and wants.