The cost function for a company is C(x)=2000+96x+4x^{3/2}where x represents thousands of units. Is there a production level that minimizes average cost?

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- April 24th 2012, 01:52 PMmonicajoyce09Min average cost
The cost function for a company is C(x)=2000+96x+4x

^{3/2}where x represents thousands of units. Is there a production level that minimizes average cost? - April 24th 2012, 01:59 PMigniteRe: Min average cost
Average cost is defined by .

In order to minimise , find such that and

You will find that satisfies these conditions. - April 24th 2012, 02:02 PMmonicajoyce09Re: Min average cost
I'm not sure I understand how to do that. I know its a simple problem I'm just lost.

- April 24th 2012, 02:12 PMigniteRe: Min average cost

Differentiating wrt x,

Similarly find and show that it's value at is greater than 0.

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