For the cost function in Exercise 1, complete the following.
(a) Determine the average cost function AC. Evaluate and interpret AC(100).
(b) Determine MAC, the marginal average cost function. Evaluate and interpret MAC( 100).
Exercise 1
Economics—Marginal Cost: The Kelomata Company determined that the monthly cost of producing its Sun Stopper patio swings can be modeled by
C(x) = 15,000 + 100x − 0.001x2 0 ≤ x ≤ 200
where x represents the number of patio swings manufactured monthly and C(x) represents the production cost in dollars. Determine MC, the marginal cost function. Evaluate MC(100) and interpret.
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