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Running Head: MANAGERIAL ECONOMICS1MANAGERIAL ECONOMICSAUTHORS NAMEUNIVERSITY OF AFFILIATION

MANAGERIAL ECONOMICS2

MANAGERIAL ECONOMICS3Plot a scatter diagram ofTVCon the vertical axis andQon the horizontal axis. Does thescatter diagram suggest a functional form forTVC? Explain briefly020040060080010001200140016001800010000200003000040000500006000070000f(x) = 41.12 x − 4312.18R² = 0.98TVC vs QLinear (TVC vs Q)Linear (TVC vs Q)QUANTITYTVCThe scatter diagram represents the relationship between independent and dependent variable. Theindependent variable is the quantity produced monthly while the dependent variable is the totalvariable cost. The relationship between the two variables is a positive relationship since the y-axis tends to increase as the x-axis increase. The correlation between the quantity produced permonth and the total variable cost is very strong. These are because upon drawing line of best fit;half the points are below the line while another half above the line. From the diagram, anincrease in quantity produced monthly cause an increase in Total variable cost.The functional formy=41.122x-4312.2Plot a scatter diagram ofAVCon the vertical axis andQon the horizontal axis. Does thescatter diagram suggest a functional form forAVC? Explain briefly

MANAGERIAL ECONOMICS4020040060080010001200140016001800051015202530354045f(x) = 0.01 x + 28.4R² = 0.67AVC vs QLinear (AVC vs Q)Linear (AVC vs Q)QUANTITYAVCThe scatter diagram represents the relationship between independent and dependent variable. Theindependent variable is the quantity produced monthly while the dependent variable is theaverage variable cost. The relationship between the two variables is a positive relationship sincethe y-axis tends to increase as the x-axis increase. The correlation between the quantity producedper month and the total variable cost is very strong. These are because upon drawing line of bestfit; half the points are below the line while another half above the line. From the diagram, anincrease in quantity produced monthly cause an increase in average variable cost.Functional formY=0.007x+28.398Estimate a quadraticAVCfunction. Present the estimated equation and evaluate theregression results (i.e., discuss the algebraic signs of the parameter estimates, thesignificance levels, and theR2).Quadratic AVC functionX=400)(x=600)

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