Total Cost Funtion
I'm newbie in economics and its really not my thing, anyways as the title says i'm having problem with this question plz help!
Total Cost Function
C = x^2/25 + 3x + 200
(i) Expression of average cost & Marginal cost
(ii) Evaluate their value at an output of 25 units.
Step by step solution would be preferred for better understanding (Nod)
(i) If the cost function is C, then the average cost function is C/X. So in your example where C = x^2/25 + 3x + 200, the average cost (AC) will be C/X = AC = (x^2/25 + 3x + 200)/X = x/25 + 3 + 200/x
(ii) To find the marginal cost function you have to differentiate the cost function with respect to x. This will yield 2x/25 + 3.
(iii) the AC at 25 units: 25/25 + 3 + 200/25 = 1 + 3 + 8 = 12. The MC at 25 units: 2*25/25 + 3 = 2 + 3 = 5.