Consider a General Cost Function C(q),with Average Cost=C(q)/q

question 68

Essay

Consider a general cost function C(q),with Average Cost=C(q)/q.Prove using calculus that the quantity which minimizes the Average Cost function is also at the point where the Marginal Cost equals the Average Cost.To do this,first derive the necessary condition for the AC to be at a minimum.

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Definitions:

Equity Method

An accounting technique used when a company holds significant influence over another company but does not have full control, involving recording investments at original cost and adjusting for the share of profit or loss.

Stock Investments

Financial assets representing ownership in a company or corporation, typically bought and sold on stock exchanges.

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A company or entity in which an investor holds a minority interest, typically through the ownership of shares.

Net Loss

This occurs when a company's expenses exceed its revenues during a specific reporting period, resulting in a negative profit.