Question

3. Another business, LEEGO, makes personalized car seat covers. The Chief Financial Officer (CFO) quotes a variable cost of $4.35 per cover and fixed costs of $7,000. a. Create a function to represent the average cost per cover to manufacture the personalized car seat covers. b. Graph the complete average cost function below, including all branches. After you graph the complete function, explain what portion of your graph we should consider for this context. c. Use the function to algebraically determine the average cost per car seat cover for a level of production of x = 5,000 units. Verify this graphically. d. What is the horizontal asymptote of this function, and what does it represent in this context? Page 33

Answer 1

(30) a Arc=4.35 Fe=woo R = 7ooo+4.35q AC = 7000 4.35 b) cast 1 Aloe Mc=4. 35 oty Q 3000 AC= 4.35+ 7000 Jooo AC = 4.35+1.425.75 - d Horizontal Asympto se means AV E=MC = 4.35 It means AL will come closch to closer to ANCIMC but will never be equal to Aucame.