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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.
…
3
votes
Accepted
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 …
9
votes
Accepted
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 …