The total cost function of a firm is given as C(x) = 0.002x^3 - 0.04x^2 + 5x + 1500 where x is the output. Determine: i) The average cost ii) The marginal cost (MC)
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The average cost is the total cost divided by the quantity of output (x). So, we have: AC(x) = \frac{C(x)}{x} = \frac{0.002x^3 - 0.04x^2 + 5x + 1500}{x} Now, let's simplify the expression: AC(x) = 0.002x^2 - 0.04x + 5 + \frac{1500}{x} Show more…
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