7. An analyst has found that Tom's Transmissions Company cost function is: C(x) = 40,000 + 500x – 0.55x2 for, where x is the number of transmissions. a) Determine the marginal Cost function C'(x). b) Determine when the Cost function is maximized. c) Determine the marginal cost function at the 100th item produced and sold. Explain significance of the marginal cost at this point. d) Determine the cost difference between 101st and 100th boat ( C(101) - C(100)). Is this value the same or different from the marginal cost from part c? Explain.

7. An analyst has found that Tom's Transmissions Company cost function is: C(x) = 40,000 + 500x – 0.55x2 for, where x is the number of transmissions. a) Determine the marginal Cost function C'(x). b) Determine when the Cost function is maximized. c) Determine the marginal cost function at the 100th item produced and sold. Explain significance of the marginal cost at this point. d) Determine the cost difference between 101st and 100th boat ( C(101) - C(100)). Is this value the same or different from the marginal cost from part c? Explain.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 5MC

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