The total cost, C, (in thousands of dollars) to make reading glasses is a function of the number of pairs of glasses made u (in thousands 4 ≤ u≤ 40) and is given by C(u) = 0.02 u²+2.4. u + 14.06. A. Find the marginal cost at the production level of 7 thousand and choose the correct units 2.68 $/pair (nearest 0.01) B. Which one is the best business interpretation of the marginal cost above The approximate cost to produce the 7,001 pair ✓ C. What is the average cost at the same production level? 4.55 (nearest 0.01) D. At this production level if another pair of glasses are made the average cost will Decrease E. At what total production level will average cost be minimized? (nearest 1000 units)

The total cost, C, (in thousands of dollars) to make reading glasses is a function of the number of pairs of glasses made u (in thousands 4 ≤ u≤ 40) and is given by C(u) = 0.02 u²+2.4. u + 14.06. A. Find the marginal cost at the production level of 7 thousand and choose the correct units 2.68 $/pair (nearest 0.01) B. Which one is the best business interpretation of the marginal cost above The approximate cost to produce the 7,001 pair ✓ C. What is the average cost at the same production level? 4.55 (nearest 0.01) D. At this production level if another pair of glasses are made the average cost will Decrease E. At what total production level will average cost be minimized? (nearest 1000 units)

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

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

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