If the marginal cost for a company is 𝑓(𝑞) = 28.3, find ∫ 28.3 𝑑𝑞, which gives the form of the cost function.

Question

If the marginal cost for a company is 𝑓(𝑞) = 28.3, find ∫ 28.3 𝑑𝑞, which gives the form of the cost function.

Answer 1

MC = 28.3

Total Cost = integral of MC = 28.3q + C, where C is an unknown constant = Fixed Cost

TC = 28.3q + FC

TC =VC + FC

Total Cost = Variable Cost + Fixed Cost

Variable Cost varies with amount of output

Fixed Cost is the initial investment which is an unavoidable cost even if production = 0