A manufacturer has fixed costs of $200 each week, and the variable costs per unit can be expressed by the function, VC = 2Q − 36.
(a) Find an expression for the total cost function and deduce that the average cost function is given by
AC = 200/Q + 2Q - 36
(b) Find the stationary point of this function and show that this is a minimum.
(c) Verify that, at this stationary point, average cost is the same as marginal cost.