Question

Suppose that the cost (in dollars) for a company to produce x pairs of a new line of jeans is described by the formula below. C(x) = 1000 + 4x + 0.02x2 + 0.0001x3 (a) Find the marginal cost function. C'(x) =

Answer 1

a) The marginal cost function is given by

C'(x) = 4 + 0.04x + 0.0003x² (in dollars)

b) C'(70) = $8.27

Explanation:

C(x) = 1000 + 4x + 0.02x² + 0.0001x³

a) Marginal cost is usually defined as the cost of producing one extra unit of product. It expresses how much the total cost is changing with respect to number of units of product.

Mathematically,

MC = (dC/dx) = C'(x)

For this question,

C'(x) = 4 + 0.04x + 0.0003x²

b) C'(70) means the marginal cost at x = 70 units, that is, how much the total cost is changing after the production of 70 units; the cost of producing one extra unit of product after producing 70 units.

C'(x) = 4 + 0.04x + 0.0003x²

C'(70) = 4 + 0.04(70) + 0.0003(70²)

C'(70) = $8.27

Hope this helps!