A company that manufactures bicycles has a fixed cost of $90000. It costs $100 to produce each bicycle. The total cost for the company is the sum of its fixed cost and variable costs. Write the total cost, C, as a function of the number of bicycles produced, x. Then, find and interpret C(110).

Solution:

The total cost for the company is the sum of its fixed cost and variable costs.

Corporate expenditures that do not depend on the amount of goods or services provided by the company are fixed costs.

Variable costs are expenses that change when changes occur in the sum of the good or service produced by a company.

C(x) = 90000 + 100x

C(110) = 90000 + 100 ( 110 )

C(110) = 90,000 + 11, 000 = 101,000

It costs $101,000 to produce 110 bicycles.

answer/// equals both average variable cost and average total cost at their respective minimums;