Problem
You are given the following cost functions:
TC = 100 + 60Q - 3Q^2 + 0.1Q^3
TC = 100 + 60Q + 3Q^2
TC = 100 + 60Q
a. Compute the average variable cost, average cost, and marginal cost for each function.
Plot them on a graph.
b. In each case, indicate the point at which diminishing returns occur. Also indicate the point of maximum cost efficiency (i.e., the point of minimum average cost).
c. For each function, discuss the relationship between marginal cost and average variable cost and between marginal cost and average cost. Also discuss the relationship between average variable cost and average cost.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.