Problem

The marginal average cost of producing $x$ digital sports watches is given by the function $\bar{C}^{\prime}(x)$, where $\bar{C}(x)$ is the average cost in dollars. \[ \bar{C}^{\prime}(x)=-\frac{1,800}{x^{2}}, \quad \bar{C}(100)=21 \] Find the average cost function and the cost function. What are the fixed costs?

Solution

Step 1 :First, we need to find the average cost function. We know that the derivative of the average cost function is given by \(\bar{C}^\prime(x) = -\frac{1800}{x^2}\). So, the average cost function \(\bar{C}(x)\) is the antiderivative of \(\bar{C}^\prime(x)\).

Step 2 :We can find the antiderivative of \(\bar{C}^\prime(x)\) by integrating \(\bar{C}^\prime(x)\) with respect to \(x\).

Step 3 :\[\int \bar{C}^\prime(x) dx = \int -\frac{1800}{x^2} dx = -1800 \int \frac{1}{x^2} dx\]

Step 4 :Using the power rule for integration, we get \(-1800 \int x^{-2} dx = -1800(-x^{-1}) + C = 1800\frac{1}{x} + C\), where \(C\) is the constant of integration.

Step 5 :We know that \(\bar{C}(100) = 21\), so we can substitute \(x = 100\) into the equation to solve for \(C\).

Step 6 :\[21 = 1800\frac{1}{100} + C\Rightarrow C = 21 - 18 = 3\]

Step 7 :So, the average cost function is \(\bar{C}(x) = 1800\frac{1}{x} + 3\).

Step 8 :Next, we need to find the cost function. The cost function \(C(x)\) is the product of the average cost function \(\bar{C}(x)\) and \(x\).

Step 9 :So, \(C(x) = x\bar{C}(x) = x(1800\frac{1}{x} + 3) = 1800 + 3x\).

Step 10 :The fixed costs are the costs that do not change with the quantity of output, which is the constant term in the cost function. So, the fixed costs are \(\boxed{1800}\) dollars.

From Solvely APP
Source: https://solvelyapp.com/problems/8474/

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