Find the level of production (in units) that will minimize the average cost. C(x) = 0.2(0.01x2 + 118)

Answer 1

Average cost A(x) = C(x) / x = 0.2(0,01x + 118/x)

A'(x) = 0.2(0.01 - 118/x²) = 0.2(0.01 - 118/x²)

A'(x) = 0 when 0.01 - 118/x² = 0

118/x² = 0.01

x² = 11800

x = √11800 ≈ 109 units