Q:

Suppose that the dollar cost of producing x radios is c(x) = 400 + 20x - 0.2x 2. Find the marginal cost when 30 radios are produced.

Accepted Solution

A:
c(x) = 400 + 20x - 0.2x²

c(30) = 400 + 20(30) - 0.2(30)²

= 400 + 600 - 0.2(900)
= 1000 - 180
= 820

It costs $820 when 30 radios are produced. 

Marginal cost is how much it would cost to make one MORE of the same product so now we find how much it costs to produce 31 radios and compare the two. 

c(31) = 400 + 20(31) - 0.2(31)²

= 400 + 620 - 0.2(961)
= 1020 - 192.2
= 827.8 or ≈828.

Now we find the difference which means we subtract the two. 

828 - 820 = 8. 

Your marginal cost is $8. 

To compare we can also do 29 radios. 

c(29) = 400 + 20(29) - 0.2(29)² = 811.8 or ≈812

820 - 812 = 8.