The management of Thermo Master Company, whose Mexican subsidiary manufactures a
ID: 2424208 • Letter: T
Question
The management of Thermo Master Company, whose Mexican subsidiary manufactures an indoor-outdoor thermometer, has estimated that the total weekly cost (in dollars) for producing x thermometers is represented by the following function. C(x) = 3400 + 10x Find the average cost function Find the marginal average cost function C Since the marginal average cost function is negative for x > 0, the rate of change of the average cost function is positive for all x > 0. Since the marginal average cost function is positive for x > 0, the rate of change of the average cost function is negative for all x > 0. Since the marginal average cost function is positive for x > 0, the rate of change of the average cost function is positive for all x > 0. Since the marginal average cost function is negative for x > 0, the rate of change of the average cost function is negative for all x > 0.Explanation / Answer
average cost function = total cost divided by no. of units
=c(x)/x =(3400+10x)/x = 3400/x+10
marginal cost function is derivative of average cost with respect to output
=d/dx[AC(x)] = -3400/x2
Putting x>0 , x=1
average cost = 3400/1+10 =3410
marginal cost = -3400/12 = -3400
answer is since the marginal cost function is negetive for x>0, the rate of change of average cost function is positive for all x>0
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