Question

Consider the following cost function which is given by C(x) = 500+0.02x, 0x20000 \leq x \leq 2000, a=1000. Find the average cost and marginal cost functions.

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The average cost is:

Cˉ(x)=C(x)x=500+0.02xx=500x+0.02\begin{align*} \bar{C}(x)&=\dfrac{C(x)}{x}\\ &=\dfrac{500+0.02x}{x}\\ &=\boxed{\dfrac{500}{x}+0.02}\\ \end{align*}

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