# Thread: Average Cost - Limits!

1. ## Average Cost - Limits!

If c is the total cost in dollars to produce q units of a product, then the average cost per unit for an output, of q units is given by c (there's a line over the c) = c/q.

Thus if the total cost equation is c = 5000 + 6q, then

c(line over it) = (5000 / q) + 6

For example, the total cost of an output of 5 units is $5030, and the average cost per unit at that level of production is$1006. By finding the limit q-->inifinity c(line over it), show that the average cost approaches a level of stability if the producer continually increases output. What is the limiting value of the average cost?

therefore lim q-->inifnity = 5000/q + 6 = 0 + 6 = 6

Now for the real question:

Repeat the problem above, given that the fixed cost is \$12,000 and the variable cost is given by the function cv= 7q

Sooo the way i see it:

C = 12000 + 7/q

therefore 12000/q + 7

= 0 + 7

= 7?

2. Originally Posted by alisheraz19

C = 12000 + 7/q

therefore 12000/q + 7

= 0 + 7

= 7?
where did you get 7/q from?

3. the text book gave it..

it said " repeat the previous question given fixed cost of 12,000 and the variable cost given by cv = 7q"