The marginal cost of drilling an oil well depends on the depth at which you are drilling; drilling becomes more expensive, per meter,as you dig deeper into the earth. The fixed costs are $2 million and if, q is the depth in meters, the marginal costs are MC(q) = 6000 + 50q dollars per meter. Find the total cost of drilling a 700-meter well.
The marginal cost of drilling an oil well depends on the depth at which you are drilling; drilling becomes more expensive, per meter,as you dig deeper into the earth. The fixed costs are $2 million and if, q is the depth in meters, the marginal costs are MC(q) = 6000 + 50q dollars per meter. Find the total cost of drilling a 700-meter well.
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 10MC
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The marginal cost of drilling an oil well depends on the depth at which you are drilling; drilling becomes more expensive, per meter,as you dig deeper into the earth. The fixed costs are $2 million and if, q is the depth in meters, the marginal costs are MC(q) = 6000 + 50q dollars per meter. Find the total cost of drilling a 700-meter well.
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