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3 votes

what results can be derived from the average cost curve?

Short answer: whether a firm's maximum 'profit' at the point where marginal revenue equals marginal cost is positive or negative depends on whether average revenue exceeds average cost at that point. …
Adam Bailey's user avatar
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3 votes
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How to calculate the minimun of Average Fixed Cost knowing the Average Fixed Cost

As the quantity of output of a good increases, fixed cost (by definition) remains the same and therefore average fixed cost per unit of output continuously decreases. Therefore the average fixed cost …
Adam Bailey's user avatar
  • 8,773
9 votes
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Cost Minimization and Karush-Kuhn-Tucker

The term $\lambda_2(x_1-1)$ in your Lagrangian is incorrect; it treats the second constraint as an equality rather than an inequality. To allow for the constraint being an inequality you can include a …
Adam Bailey's user avatar
  • 8,773