Economics - Find increase of cost

In summary, The conversation is about finding the increase in cost when the production level is raised from 1200 to 1600. The question involves the marginal cost of producing a certain product, which is given by a polynomial equation. The person asking the question tried taking the integral and evaluating it, but got a wrong answer. Another person suggests that maybe the problem meant for the marginal cost to be interpreted literally and offers alternative methods to solve the problem. Eventually, it is revealed that there was a mistake in the integration and the correct answer is obtained by integrating from 1600 to 1200.
  • #1
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Im not sure if anyone can help me with this, I haven't seen a question like this I am guessing its easy. I tried just taking the integral and evaluating, bu tthat gave me a wrong answer.

Q:The marginal cost of producing x units of a certain product is 74+1.1x-0.002x^2+0.00004x^3. Find the increase in cost if the production level is raise from 1200 to 1600
 
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  • #2
Well, isn't marginal cost the derivative of the cost with respect to the number of goods produced??

In that case, you integrated incorrectly.
 
  • #3
Yes that is what I thought, but the answer I got was slightly off the given answer
 
  • #4
Well, IF you integrated correctly, then maybe the problem meant for you to take "marginal cost" literally as the cost of producing one more unit. In this case you would have to take a sum rather than an integral. Or maybe they wanted you to approximate by considering the cost of the nth unit to be the integral from n-.5 to n+.5 of the marginal cost--in this case you would integrate from 1200.5 to 1600.5
 
Last edited:
  • #5
Oops..Must have made a mistake..Integration from 1600 to 1200 yields the correct answer
 

1. What is the difference between cost and price in economics?

The cost of a product or service refers to the total amount of resources (such as materials, labor, and overhead costs) that are required to produce it. Price, on the other hand, is the amount that a consumer pays for a product or service. In economics, the price is often determined by the intersection of supply and demand, while cost is a factor in determining the profitability of a product or service for a business.

2. How is the increase of cost determined in economics?

The increase of cost in economics is determined by various factors, such as inflation, changes in technology or supply chain, and changes in the cost of resources. It can also be influenced by market conditions, competition, and government policies. Economic analysis and forecasting are commonly used to predict and track changes in cost over time.

3. What is the impact of an increase in cost on the economy?

An increase in cost can have both positive and negative impacts on the economy. On one hand, it can lead to higher prices for goods and services, which can decrease consumer purchasing power and potentially slow economic growth. On the other hand, an increase in cost can also incentivize businesses to innovate and find more efficient ways of producing goods and services, which can lead to economic growth and development.

4. How do economists measure the increase of cost?

Economists use various metrics and methods to measure the increase of cost, depending on the specific context and purpose of the analysis. One commonly used metric is the consumer price index (CPI), which measures the average change in prices of goods and services purchased by households. Other methods include producer price indexes, input-output analysis, and cost-benefit analysis.

5. How can the increase of cost be managed in economics?

The increase of cost can be managed through various economic policies and strategies. These may include implementing regulations to control prices, investing in research and development to improve efficiency and reduce costs, and using fiscal and monetary policies to manage inflation. In some cases, businesses may also adjust their pricing or production strategies to manage the impact of cost increases on their profitability.

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