Answer:
a. The marginal cost is $0.2.
b. The average cost is $2.20.
Explanation:
Given in the question are the following:
Y = 0.2X + 6000 ................ (1)
Where; Y = Total Costs in $
X = total number of maps dispensed (in a year)
a. What is the marginal cost?
The marginal cost (MC) can be obtained by differentiating equation (1) with respect to X as follows:
MC = dY/dX = 0.2
Therefore, the marginal cost is $0.2.
b. What is the average cost?
This can be calculated as follows:
At X = 3000 maps
Substitute X = 3000 into equation (1) in part a to obtain the total cost as follows:
Y = 0.2(3000) + 6000
Y = (0.2 * 3000) + 6000
Y = 600 + 6000
Y = $6,600
The average cost now be calculated using the following formula:
Average cost = Y / X ...................... (2)
Where;
Y = Total Costs in $ = $6,600
X = Number of maps per year = 3,000
Substituting the values into equation (2), we have:
Average cost = $6,600 / 3,000 = $2.20
Therefore, the average cost is $2.20.
