The total cost C(x) of a firm is $C(x) = 0.0005x^3 - 0.7x^2 - 30x + 3000$ where x is the output. Determine average cost (AC).
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → $AC=0.0005x^2 −0.7x−30+ \frac{3000}{x}$
Average cost $(AC) = \frac{\text{Total cost}}{\text{Output}}=\frac{C(x)}{x}$
$= 0.0005x^2 -0.7x-30 +\frac{3000}{x}$