Question

The cost, CC, in millions of dollars of producing qq items is given by C=5.7+0.002qC=5.7+0.002 q. Interpret the 5.75.7 and the 0.0020.002 in terms of production. Give units.

Solution

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Answered 1 year ago
Answered 1 year ago
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Let's remember that the total cost can be determined as

Total cost=Fixed cost+Variable costC(q)=Fixed cost+qItem cost(1)\begin{aligned} \text{Total cost}&=\text{Fixed cost}+\text{Variable cost}\\ C(q)&=\text{Fixed cost}+q\cdot\text{Item cost}\tag{1} \end{aligned}

where qq is the number of items.

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