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Suppose that the total cost function, in dollars, for the production of \( x \) units of a product is given by the equation shown below. \( C(x)=4,410+85 x+0.1 x^{2} \) Find the equation of the average cost function, \( \bar{C}(x) \). (a) Find the instantaneous rate of change of average cost with respect to the number of units produced, at any level of production. 210 (b) Find the level of production at which this rate of change equals zero. \( x=210 \) (c) At the value found in part (b), which of the following is true? () The average cost function is greater than the total cost function.

Ask by Edwards Barrett. in the United States
Feb 03,2025

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At \( x = 210 \), the average cost is less than the total cost, so the statement is false.

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Bonus Knowledge

To find the average cost function, \(\bar{C}(x)\), we divide the total cost function \(C(x)\) by the number of units produced, \(x\): \(\bar{C}(x) = \frac{C(x)}{x} = \frac{4,410 + 85x + 0.1x^2}{x} = \frac{4,410}{x} + 85 + 0.1x\). This equation gives us the cost per unit produced, making it easier to analyze efficiency! Now, regarding the instantaneous rate of change of the average cost, it represents how quickly the average cost is changing as you produce more units. When this rate is zero at \(x = 210\), it indicates that you’ve hit a sweet spot in production: any more units produced won’t affect the average cost, which is an optimal point for businesses aiming to maximize profit and minimize costs!

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