{"id":55530,"date":"2024-04-16T00:28:57","date_gmt":"2024-04-16T00:28:57","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=55530"},"modified":"2024-04-16T00:28:57","modified_gmt":"2024-04-16T00:28:57","slug":"the-short-run-cost-function-of-a-firm-is-as-follows-tc-200-5q-2q2-where-tc-total-cost-q-physical-units-of-the-product-of-the-firm-what-would-be-the-level-of-optimum-output","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-short-run-cost-function-of-a-firm-is-as-follows-tc-200-5q-2q2-where-tc-total-cost-q-physical-units-of-the-product-of-the-firm-what-would-be-the-level-of-optimum-output\/","title":{"rendered":"The short-run cost function of a firm is as follows: TC = 200 + 5Q + 2Q2 Where TC = Total Cost, Q = Physical units of the product of the firm What would be the level of optimum output ?"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;5&#8243; option2=&#8221;10&#8243; option3=&#8221;12&#8243; option4=&#8221;15&#8243; correct=&#8221;option2&#8243;]<!--more--><\/p>\n<p>The correct answer is B.<\/p>\n<p>The optimum output is the level of output at which the marginal cost is equal to the average cost. In this case, the marginal cost function is $MC = 5 + 4Q$ and the average cost function is $AC = 200\/Q + 5 + 2Q$. Setting the marginal cost equal to the average cost, we get $5 + 4Q = 200\/Q + 5 + 2Q$. Solving for $Q$, we get $Q = 10$.<\/p>\n<p>Option A is incorrect because the marginal cost is still decreasing at $Q = 5$. Option C is incorrect because the marginal cost is greater than the average cost at $Q = 12$. Option D is incorrect because the marginal cost is still increasing at $Q = 15$.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;5&#8243; option2=&#8221;10&#8243; option3=&#8221;12&#8243; option4=&#8221;15&#8243; correct=&#8221;option2&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-55530","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The short-run cost function of a firm is as follows: TC = 200 + 5Q + 2Q2 Where TC = Total Cost, Q = Physical units of the product of the firm What would be the level of optimum output ?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-short-run-cost-function-of-a-firm-is-as-follows-tc-200-5q-2q2-where-tc-total-cost-q-physical-units-of-the-product-of-the-firm-what-would-be-the-level-of-optimum-output\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The short-run cost function of a firm is as follows: TC = 200 + 5Q + 2Q2 Where TC = Total Cost, Q = Physical units of the product of the firm What would be the level of optimum output ?\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;5&#8243; 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