A linear cost function is
C(x) = 7x+ 800. (Assume C is measured in dollars.)
(a) What are the slope and the C-intercept?
(b) What is the marginal cost
MC??
MC =
What does the marginal cost mean?
If production is increased by this many units, the costdecreases by $1.Each additional unit produced reduces the cost bythis much (in dollars). If production isincreased by this many units, the cost increases by $1.Eachadditional unit produced costs this much (in dollars).
(c) What are the fixed costs?
$
(d) How are your answers to parts (a), (b), and (c) related?
slope = fixed costs, and C-intercept = marginal cost
= marginal cost
= marginal costslope = marginal cost, and C-intercept =fixed costs
(e) What is the cost of producing one more item if 50 arecurrently being produced?
$
What is the cost of producing one more item if 100 arecurrently being produced?
