Applications of Calculus Marginal Cost and Average Total Cost
>> YOUR LINK HERE: ___ http://youtube.com/watch?v=4oyYYwL_etw
MARGINAL COST: • The marginal cost of production is the change in total cost that comes from making or producing one additional item. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale. The calculation is most often used among manufacturers as a means of isolating an optimum production level. • Manufacturing concerns often examine the cost of adding one more unit to their production schedules. This is because at some point, the benefit of producing one additional unit and generating revenue from that item will bring the overall cost of producing the product line down. The key to optimizing manufacturing costs is to find that point or level as quickly as possible. • AVERAGE COST: • In economics, average cost and/or unit cost is equal to total cost divided by the number of goods produced (the output quantity, Q). It is also equal to the sum of average variable costs (total variable costs divided by Q) plus average fixed costs (total fixed costs divided by Q). • This calculus video tutorial explains the concept behind marginal revenue, marginal cost, marginal profit, average cost function, price and demand functions. It shows you how to find the production level to minimize the average cost as well as how to find the minimum average cost so as to maximize the profit of a company. This video contains plenty of examples and practice problems. • Here is a list of topics: • 1. Cost Function - The price to a produce a number of items • 2. Average Cost - The average price to produce a single unit • 3. Production Level - The number of units or x • 4. Marginal Cost - Derivative of the Cost Function • 5. Marginal Cost represents the increase in total cost to produce one extra item • 6. Minimizing Average Cost Function - Finding The Production Level and the Minimum Average Cost • 7. Price Function or Demand Function - The selling price of an item as a function of x • 8. Supply vs Demand - Inverse Relationship - Business Economics • 9. Business Calculus - Revenue = Price Function x Number of Units (x) • 10. Marginal Revenue, Marginal Cost, and Marginal Profit • 11. Maximizing Profit - Finding the maximum value using the derivative 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