Deriving the Marginal Cost Function

Oct 13, 2025 by magicalceylontours.com 33 views

The Total Cost of Production: Understanding Marginal and Average Cost Functions

In economics, the total cost of production is a crucial concept that helps businesses and policymakers understand the relationship between the quantity produced and the total cost incurred. The total cost function is typically represented by the equation TC = f(q), where TC is the total cost and q is the quantity produced. In this article, we will explore the total cost function given by TC = 300 ln(q + 30) + 150 and derive the marginal cost (MC) and average cost (AC) functions.

The total cost function is given by the equation TC = 300 ln(q + 30) + 150. This equation represents the total cost incurred by a firm when producing a certain quantity of a good. The function consists of two parts: the first part, 300 ln(q + 30), represents the fixed costs, while the second part, 150, represents the variable costs.

Deriving the Marginal Cost Function

The marginal cost function represents the rate of change of the total cost with respect to the quantity produced. It is denoted by MC and is calculated as the derivative of the total cost function with respect to q.

To derive the marginal cost function, we will use the chain rule of differentiation. The chain rule states that if we have a composite function of the form f(g(x)), then the derivative of f(g(x)) with respect to x is given by f'(g(x)) * g'(x).

In this case, the total cost function is a composite function of the form f(g(q)), where g(q) = q + 30 and f(g(q)) = 300 ln(g(q)) + 150.

Using the chain rule, we can write the derivative of the total cost function with respect to q as:

MC = d(TC)/dq = d(300 ln(q + 30) + 150)/dq

= 300 * (1/(q + 30)) * dq/dq

= 300/(q + 30)

Therefore, the marginal cost function is given by MC = 300/(q + 30).

Deriving the Average Cost Function

The average cost function represents the total cost per unit produced. It is denoted by AC and is calculated as the total cost divided by the quantity produced.

To derive the average cost function, we will use the quotient rule of differentiation. The quotient rule states that if we have a function of the form f(x)/g(x), then the derivative of f(x)/g(x) with respect to x is given by (f'(x) * g(x) - f(x) * g'(x)) / (g(x))^2.

In this case, the average cost function is given by AC = TC/q.

Using the quotient rule, we can write the derivative of the average cost function with respect to q as:

d(AC)/dq = d(TC/q)/dq

= (d(TC)/dq * q - TC * dq/dq) / q^2

= (300/(q + 30) * q - (300 ln(q + 30) + 150) * 1) / q^2

= (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2

Therefore, the average cost function is given by AC = (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2.

In this article, we have derived the marginal cost and average cost functions from the given total cost function. The marginal cost function represents the rate of change of the total cost with respect to the quantity produced, while the average cost function represents the total cost per unit produced. These functions are essential in understanding the relationship between the quantity produced and the total cost incurred by a firm.

[1] Mankiw, N. G. (2017). Principles of Economics. Cengage Learning.
[2] Varian, H. R. (2014). Microeconomic Analysis. W.W. Norton & Company.

Derivation of the Marginal Cost Function

To derive the marginal cost function, we will use the chain rule of differentiation.

MC = d(TC)/dq = d(300 ln(q + 30) + 150)/dq

= 300 * (1/(q + 30)) * dq/dq

= 300/(q + 30)

Derivation of the Average Cost Function

To derive the average cost function, we will use the quotient rule of differentiation.

d(AC)/dq = d(TC/q)/dq

= (d(TC)/dq * q - TC * dq/dq) / q^2

= (300/(q + 30) * q - (300 ln(q + 30) + 150) * 1) / q^2

= (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2

Therefore, the average cost function is given by AC = (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2.
Q&A: Understanding Marginal and Average Cost Functions

In our previous article, we explored the total cost function given by TC = 300 ln(q + 30) + 150 and derived the marginal cost (MC) and average cost (AC) functions. In this article, we will answer some frequently asked questions about marginal and average cost functions to help you better understand these concepts.

Q: What is the marginal cost function?

A: The marginal cost function represents the rate of change of the total cost with respect to the quantity produced. It is denoted by MC and is calculated as the derivative of the total cost function with respect to q.

Q: How do I calculate the marginal cost function?

A: To calculate the marginal cost function, you need to take the derivative of the total cost function with respect to q. In this case, the total cost function is given by TC = 300 ln(q + 30) + 150. Using the chain rule of differentiation, we can write the derivative of the total cost function with respect to q as:

MC = d(TC)/dq = d(300 ln(q + 30) + 150)/dq

= 300 * (1/(q + 30)) * dq/dq

= 300/(q + 30)

Q: What is the average cost function?

A: The average cost function represents the total cost per unit produced. It is denoted by AC and is calculated as the total cost divided by the quantity produced.

Q: How do I calculate the average cost function?

A: To calculate the average cost function, you need to divide the total cost by the quantity produced. In this case, the total cost function is given by TC = 300 ln(q + 30) + 150. Using the quotient rule of differentiation, we can write the derivative of the average cost function with respect to q as:

d(AC)/dq = d(TC/q)/dq

= (d(TC)/dq * q - TC * dq/dq) / q^2

= (300/(q + 30) * q - (300 ln(q + 30) + 150) * 1) / q^2

= (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2

Q: What is the relationship between the marginal cost function and the average cost function?

A: The marginal cost function and the average cost function are related in that the marginal cost function represents the rate of change of the average cost function with respect to the quantity produced.

Q: How do I use the marginal cost function and the average cost function in real-world applications?

A: The marginal cost function and the average cost function are essential tools in understanding the relationship between the quantity produced and the total cost incurred by a firm. They can be used to:

Determine the optimal quantity to produce
Calculate the total cost of production
Analyze the impact of changes in the quantity produced on the total cost

In this article, we have answered some frequently asked questions about marginal and average cost functions to help you better understand these concepts. We hope that this article has provided you with a deeper understanding of the marginal cost function and the average cost function and how they can be used in real-world applications.

[1] Mankiw, N. G. (2017). Principles of Economics. Cengage Learning.
[2] Varian, H. R. (2014). Microeconomic Analysis. W.W. Norton & Company.

Derivation of the Marginal Cost Function

To derive the marginal cost function, we will use the chain rule of differentiation.

MC = d(TC)/dq = d(300 ln(q + 30) + 150)/dq

= 300 * (1/(q + 30)) * dq/dq

= 300/(q + 30)

Derivation of the Average Cost Function

To derive the average cost function, we will use the quotient rule of differentiation.

d(AC)/dq = d(TC/q)/dq

= (d(TC)/dq * q - TC * dq/dq) / q^2

= (300/(q + 30) * q - (300 ln(q + 30) + 150) * 1) / q^2

= (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2

Therefore, the average cost function is given by AC = (300q/(q + 30) - 300 ln(q + 30) - 150) / q^2.