Microeconomics—Manufacturing Cost: (continuation of Exercise 1) Recall that for a cost fun...

Microeconomics—Manufacturing Cost: (continuation of Exercise 1) Recall that for a cost function, the average cost AC(x ) is given by and gives the per-unit cost of making a product at production level x.

(a) For the cost function in Exercise 1, write and simplify the average cost function AC(x).

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(b) Determine AC′(x).

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(c) Evaluate AC(300) and AC′(300) and interpret each.

Exercise 1

Microeconomics—Manufacturing Cost: From past data analysis, the LaRoche Raincoat Company finds that the manufacturing cost for their Jeffery coat can be modeled by

where x represents the number of coats produced and C(x) represents the cost in dollars.

(a) Determine C′(x).

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(b) Evaluate C (300) and C′(300) and interpret each.