Total cost from marginal cost via the Net Change Theorem
A company's marginal cost function is given by dollars per unit, where is the number of units produced. Assume the cost of producing zero units (the fixed cost) is $0.
Using the Net Change Theorem, find the total cost of producing the first units. That is, compute the value of
and interpret it as the total cost (in dollars) of producing 200 units.
Hint
The Net Change Theorem tells you that integrating the marginal cost (rate of change of cost) from 0 to 200 gives the total change in cost, which equals total cost here since fixed cost is 0. Find an antiderivative of and evaluate it at the two bounds.
Step-by-step solution
By the Net Change Theorem, the total cost of producing 200 units equals , where is an antiderivative of . An antiderivative of is (plus a constant, which cancels in the definite integral).
Evaluating: , and . Therefore the total cost is dollars, meaning it costs $8000 to produce the first 200 units.
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