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Ed's Construction Company Has the Following Short-Run Cost Function: Q³

Question 25

Essay

Ed's construction company has the following short-run cost function: q³ - 10q² + 36q.
a.What level of output will minimize the average cost? What is the AC at this point?
b.Does the production process indicate diminishing returns? How can you tell?

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a.When dAC/dq=0 or equivalently AC=MC,th...

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