A micro-entrepreneur produces caps and hats for women. The output-cost data of the business is reproduced below:
Output
50
100
150
200
250
300
350
Total Cost
890
920
1000
1260
1470
1850
Using the above data estimate total cost equation and determine the average and marginal cost functions. Determine the output rate that will minimize average cost and the per-unit
2410
Answer:
(a) A micro-entrepreneur produces caps and hats for women. The output-cost data of the business is reproduced below:
Output
Total Cost
50
870
100
920
150
990
200
1240
250
1440
300
1940
350
2330
TC = 944.29 – 2.24Q
Explanation:
Using the above estimated total cost equation determine the average and marginal cost functions. Determine the output rate that will minimize average cost and the per-unit cost at that rate of output. The current market price of caps and hats per unit is Tk. 6.00 and is expected to remain at that level for the foreseeable future. Should the firm continue its production?
(b) Using the following cost data how would you estimate your short run supply curve. If there are 100 firms in the industry, would be the industry supply? [ Hint. Think about the relationship between MC and AVC and find the output supply of a single a firm]
Answer:
don’t know the answer sorry