Answer:
hence the required minimum production level is 12units
Step-by-step explanation:
Given the cost function expressed as c(x) = x^3 - 24x^2 + 30,000x
The average cost function will be c(x)/x
Dividing the cost function through by x
Average cost function = c(x)/x = x³/x - 24x²/x + 30,000x/x
Average cost function = x²-24x + 30,000
A(x) = x²-24x + 30,000
If the average cost is minimized, hence dA/dx = 0
dA/dx = 2x - 24
0 = 2x - 24
-2x = -24
Divide both sides by -2
-2x/-2 = -24/-2
x = 12
For the second deriviative
d²A/dx² = 2 which is greater than zero
Hence a production level that will minimize the average cost per item of making x items is 12
