9514 1404 393
Answer:
a) q = 15 at minimum average cost; q = 10 at minimum marginal cost
b) marginal cost = average cost = 225 at q = 15
Explanation:
The average cost is the total cost divided by the number of units.
A = C/q = 300 -10q +1/3q^2
The marginal cost is the derivative of the total cost.
M = 300 -20q +q^2
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a) The minimum average cost is where its derivative is zero.
A' = 0 = -10 +2/3q ⇒ q = 15
The minimum marginal cost is where its derivative is zero.
M' = -20 +2q ⇒ q = 10
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b) The average cost for 15 units produced is ...
A(15) = 300 -10(15) +1/3(15^2) = 225
The marginal cost at that same production level is ...
M(15) = 300 -20(15) +15^2 = 225
The average cost and marginal cost are equal at the minimum average cost.
