Gce Model Questions Vol1 2018 Economics Question 49

Practice objective / multiple choice question 49 from the 2018 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2018 Economics Objective / Multiple Choice Medium Difficulty
Question 49 GCE_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

A firm's total cost function is \(TC = 0.5Q^{2} + 20Q + 100\), where \(Q\) is output. Determine the level of output that minimises average total cost (ATC) and state the minimum ATC value.

Answer Options

A. Output that minimises ATC: \(Q = 10\) units; minimum ATC = \(30\) (≈ 30).
Correct Answer B. Output that minimises ATC: \(Q = 10\sqrt{2}\) units; minimum ATC = \(20 + 10\sqrt{2}\) (≈ 34.14).
C. Output that minimises ATC: \(Q = 15\sqrt{2}\) units; minimum ATC = \(20 + 15\sqrt{2}\) (≈ 41.21).
D. Output that minimises ATC: \(Q = 5\sqrt{2}\) units; minimum ATC = \(20 + 5\sqrt{2}\) (≈ 27.07).
Correct Answer
B
Correct Option:
Output that minimises ATC: \(Q = 10\sqrt{2}\) units; minimum ATC = \(20 + 10\sqrt{2}\) (≈ 34.14).

About This Question

This is Gce Model Questions Vol1 2018 Economics Question 49. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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