Answer:
7 units
Step-by-step explanation:
Given
[tex]C(x) = 2x + 54 + \frac{98}{x}[/tex]
Required
The units that minimize the average cost
[tex]C(x) = 2x + 54 + \frac{98}{x}[/tex]
Differentiate
[tex]C' = 2 + 0 - 98x^{-2}[/tex]
[tex]C' = 2 - 98x^{-2}[/tex]
Equate to 0 to solve for x
[tex]0 = 2 - 98x^{-2}[/tex]
Collect like terms
[tex]98x^{-2} = 2[/tex]
Divide by 98
[tex]x^{-2} = \frac{1}{49}[/tex]
Rewrite as:
[tex]\frac{1}{x^2} = \frac{1}{49}[/tex]
Take square roots of both sides
[tex]\frac{1}{x} = \±\frac{1}{7}[/tex]
Take multiplicative inverse of both sides
[tex]x = \±7[/tex]
Only positive value will produce critical value. Hence, 7 units will produce the minimum average cost
