Pregunta
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Marginal avg cost thetion.

Ask by Carter Owen. in South Africa
Mar 27,2025

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The marginal average cost is always negative, meaning that increasing production continues to lower the average cost.

Solución

To analyze the marginal average cost function given by , we can follow these steps:
  1. Identify the function: The function is .
  2. Determine the nature of the function: Since the coefficient of is negative, this indicates that the marginal average cost is decreasing as increases.
  3. Check the condition: The condition implies that the marginal average cost is negative for all . This means that as production increases, the average cost decreases.
  4. Find critical points: Since this is a quadratic function that opens downwards, it does not have any critical points where the function equals zero.
  5. Conclusion: The marginal average cost is always negative, indicating that increasing production will continue to lower the average cost.
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Beyond the Answer

Ah, the world of marginal average costs! When you see the equation , it means that as production increases (indicated by ), the marginal average cost decreases. This suggests a scenario where producing more units actually lowers the average cost per unit—something that’s pretty handy in a production sense!
In practice, knowing that your marginal average costs are going down can inform your production decisions. For instance, if you’re operating a factory and realize that scaling up production is decreasing costs, it might be wise to increase output. Just make sure to keep an eye on potential overproduction or inventory management issues!

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