Answer to Question #144977 in Math for Fridah

Question

Two students were discussing about the relationship between average cost and total cost. One student said that since average cost is obtained by dividing the cost function by the number of units Q, it follows that the derivative of the average cost is the same as marginal cost, since the derivative of Q is 1

Required:
Comment on this analysis. (4 marks)

Answer 1

The derivative of the average cost is not the same as marginal cost, which is the derivative of total cost, because the total cost is average cost multiplied by Q.