At What Output Level,q,is Average Cost Minimized If the Short-Run

question 16

Multiple Choice

At what output level,q,is average cost minimized if the short-run costs for a company are C = 40 + 4q + q²?

• A) q = 2
• B) q = 0
• C) q = 40
• D) q = 2

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Definitions:

Expected Value

A calculated average of the possible outcomes of a given event, weighted by the likelihood of each outcome occurring.

Natural Log

The logarithm to the base \(e\) (where \(e\) is approximately 2.718), a constant used in mathematics and economics to model growth processes.

Lottery Ticket

A slip of paper or card used to participate in a lottery game, where winners are typically selected by a random draw.

Risk Averse

A preference for certainty over uncertainty with regards to outcomes, particularly in the context of financial decisions.