For a Firm, Let Total Cost Be TC(Q) = 10Q²

question 63

Multiple Choice

For a firm, let total cost be TC(Q) = 10Q² and marginal cost be MC(Q) = 20Q. Which of the following is an expression for the output elasticity of total cost?

• A) ϵ_TC,Q = 10Q.
• B) ϵ_TC,Q = 2Q.
• C) ϵ_TC,Q = 2.
• D) ϵ_TC,Q = 20Q.

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Definitions:

Close Substitutes

Products or services that can serve almost the same function as another in the eyes of consumers.

Price Increase

The rise in the cost of goods or services over time, which can be caused by factors such as inflation, increased production costs, or high demand.

Inelastic Demand

A market situation where the demand for a product does not significantly change with a change in price.

Total Expenditures

The combined amount of money spent by an individual, organization, or government over a specific period of time.