Economics—Marginal Analysis: For the cost function in Exercise 1, complete the following.
(a) Determine the average cost function AC. Evaluate and interpret AC(200).
(b) Determine MAC, the marginal average cost function. Evaluate and interpret MAC(200).
Exercise 1
Economics—Marginal Cost: The Country Day Company determines that the daily cost of producing its Garden King lawn tractor tires can be modeled by
C(x) = 100 + 40x − 0.001x2 0 ≤ x ≤ 300
where x represents the number of tires produced each day, and C(x) represents the cost in dollars. Determine MC, the marginal cost function. Evaluate MC(200) and interpret.
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