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Solve the following.
The cost of manufacturing x units of a commodity is 5x² + 30x + 5. Find the range of output where…
The cost of manufacturing $x$ units of a commodity is $5x^2 + 30x + 5$. Find the range of output where Average Cost is increasing.
Answer
Answer
Average cost $AC=\frac{5x^2+30x+5}{x}=5x+30+\frac{5}{x}$.
$\frac{d(AC)}{dx}=5-\frac{5}{x^2}$. AC is increasing when $5-\frac{5}{x^2}>0$, i.e. $x^2>1$, so $x>1$ (output cannot be negative).
Final answer: $x>1$