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11.2 The cost of producing x teddy bears per day at the Cuddly Companion Co. is calculated by their marketing staff to be given by the formula C(x) = 100 + 36x − 0.01x2. (a) Find the marginal cost function C'(x). C'(x) =        Use it to determine how fast the cost is going up (in $) at a production level of 100 teddy bears. $  per teddy bear Compare this with the exact cost of producing the 101st teddy bear (in $). The cost is increasing at a rate of $

11.2 The cost of producing x teddy bears per day at the Cuddly Companion Co. is calculated by their marketing staff to be given by the formula C(x) = 100 + 36x − 0.01x2. (a) Find the marginal cost function C'(x). C'(x) =        Use it to determine how fast the cost is going up (in $) at a production level of 100 teddy bears. $  per teddy bear Compare this with the exact cost of producing the 101st teddy bear (in $). The cost is increasing at a rate of $

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.4P
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11.2

The cost of producing x teddy bears per day at the Cuddly Companion Co. is calculated by their marketing staff to be given by the formula
C(x) = 100 + 36x − 0.01x2.
(a)
Find the marginal cost function C'(x).
C'(x) = 
 
 
 
Use it to determine how fast the cost is going up (in $) at a production level of 100 teddy bears.
$  per teddy bear
Compare this with the exact cost of producing the 101st teddy bear (in $).
The cost is increasing at a rate of $  per teddy bear. The exact cost of producing the 101st teddy bear is $  . Thus, there is a difference of $  .
(b)
Find the average cost function 
C,
 and evaluate 
C(100)
 (in $).
C(x)
=
 
 
 
C(100)
= $ per teddy bear
What does the answer tell you?
The average cost of producing the first hundred teddy bears is $  per teddy bear.
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