When we move from C to B along the production possibility curve illustrated at right, the opportunity cost of spittoons in terms of bassoons is: 35 over 68 54 over 50 14 over 15 15 over 14
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The slope represents the rate at which one good must be given up to produce more of the other good. Show more…
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Key Concepts
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Consider the cost function of Example 6. (a) Graph $C(x)$ in the window $[0,60]$ by $[-300,1260].$ (b) For what level of production will the cost be $\$ 535 ?$ (c) For what level of production will the marginal cost be $\$ 14 ?$
The Derivative
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In Exercises 50 and $51,$ the average cost per unit at production level $x$ is defined as $$ C_{\mathrm{avg}}(x)=\frac{C(x)}{x} $$ where $C(x)$ is the cost of producing $x$ units. Average cost is a measure of the efficiency of the production process. Show that $C_{\text {avg }}(x)$ is equal to the slope of the line through the origin and the point $(x, C(x))$ on the graph of $y=C(x)$. Using this interpretation, determine whether average cost or marginal cost is greater at points $A, B$, C, $D$ in Figure $17 .$
Differentiation
Rates of Change
What is the opportunity cost of increasing the number of televisions produced by 4, moving from point B to point C?
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