a)The avareage cost of producing dictionaries is the cost of producing N dictionaries divided by , so is:Originally Posted by bobby77
So units of cost per dictionary.
b)The marginal cost of production when production is at units is the
additional cost of producing the th unit (check the definition you have
been given to see if it agrees with this). So here the marginal cost is units of cost.
But that is not what the question asks for, it asks for the marginal avaerage cost
[Math]MAC(n)[/tex], which is a term which is unfamilliar to me, but I will assume this means
the change in average cost of producing one more item:
c) The marginal average cost is an approximation to the rate of change
of the average cost, so let:
So substituting for gives: