Homework Answers
Cost function :
c(x) = 1600 + 0.2 *x^2
Now, cost per unit (u)= 1600/x + 0.02 * x
u' = -1600/x^2 + 0.02 = 0
x = 283
u'' = 3200/x^3
U''(283) > 0
minimum bits to be produced = 283
minimum average cost = 1600/283 + 0.02 * 283 = $11.31
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