Question
A manufacturer has determined that the total cost
of operating a factory Is
.inn
where
is the number of units produced. At what level of production will the average cost per unit be minimized? (The average cost
par unit is
).
units
par unit is
Ask by Harper Wade. in the United States
Mar 22,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The average cost per unit is minimized at 100 units.
Solution

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Bonus Knowledge
To minimize the average cost per unit, you first need to express the average cost
as a function of
:
Now, to find the minimum average cost, differentiate
with respect to
and set the derivative to zero:
Setting
:
Thus, the level of production that minimizes the average cost per unit is
units.