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Math final section c project

The project by Anuj Agarwal explores the concepts of cost, average cost, and marginal cost, emphasizing their importance for businesses in determining production expenses and pricing strategies. It includes definitions, formulas, and graphical representations of these costs, as well as a practical example to illustrate their calculations. The reflection section highlights the learning outcomes and connections to other subjects such as commerce and economics.

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Anuj Agarwal
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Download as PDF, TXT or read online on Scribd
12 views

Math final section c project

The project by Anuj Agarwal explores the concepts of cost, average cost, and marginal cost, emphasizing their importance for businesses in determining production expenses and pricing strategies. It includes definitions, formulas, and graphical representations of these costs, as well as a practical example to illustrate their calculations. The reflection section highlights the learning outcomes and connections to other subjects such as commerce and economics.

Uploaded by

Anuj Agarwal
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 11

MATHS PROJECT

Cost, Average Cost


and Marginal Cost
SECTION-C
Anuj Agarwal
ACKNOWLEDGEMENT
I, Anuj Agarwal would like to express my gratitude towards my
Mathematics teacher Mr. Rahul Luther who gave me this
golden opportunity to express myself in this project. An ocean
full of gratitude to my Maths teacher who gave me this topic
and helped me whenever and wherever possible. I would like
to to thank my parents and my sibling who helped me prepare
this project. Also I would like to thank my fellow mates who
helped me make this project.
INDEX

Sr No. Topic Page No.


1 Aim and 4
introduction

2 Cost 5

3 Average cost 6

4 Marginal Cost 7

5 Relationship 8
etween AC and
MC

6 Example 9

7 Reflection 10

8 Bibliography 11
AIM AND INTRODUCTION
Aim- The aim of the project is to draw a rough sketch of cost,
average cost and marginal cost.

Introduction- The different types of cost namely total cost,


average cost and marginal cost are very important for the
businesses. These costs are used by producers to analyse the
amount they will have to spend on producing a commodity. It
also determines the price of the commodity. As the cost plus
desired profit will determine the price of the commodity. Not
only in producing units but also service giving businesses need
to analyse cost to decide upon the price of their services.

The cost is calculated mathematically using calculus. The cost


function denoted by C(x) is a mathematical formula where ‘x’
represents the number of units produced, that gives the total
cost to produce a certain number of units.

Besides total cost we can also use the cost function to calculate
the average cost and marginal cost.
COST
DEFINITION-Cost is the total amount of money spent on all
types of inputs- fixed(like machinery) and variable inputs(like
labour) incurred in producing a given quantity of a commodity.

FORMULA - C(x) = F + V(x)

Where: C = Cost function

X = Number of units produced

F = Fixed cost of production

V = Variable cost of production

The total fixed cost remains constant always but variable cost
constantly changes with the change in units of production.

The Cost Curve is the sum total of fixed cost curve and variable
cost curve. The curve starts from a point on Y axis as cost can
never be zero. It is concave downwards initially which shows
cost increases at decreasing rate and then it is concave
upwards which shows that cost increases with increasing rate.
AVERAGE COST
DEFINITION- Average Cost is the per unit cost of the product.

FORMULA - AC = C(x) / x

Where: AC = Average Cost

C(x) = Cost Function

X = Number of units produced

The Average Cost curve is a ‘U’ shaped curve.The falling


portion is due to increasing returns and rising portion is due to
decrease in returns.
MARGINAL COST
DEFINITION- Marginal cost is the additional cost incurred by
producing an additional unit of a commodity.

FORMULA – MC=d [C(x)] / dx

Derivative of cost

Since MC is the differentiation of cost function hence the graph


is the slope of the cost curve and hence the cost curve is a ‘U’
shaped curve.
RELATIONSHIP BETWEEN AC
AND MC
From the above graphs we understand that :-

· As long as MC is less than AC, AC falls.


· When MC is more than AC, AC rises.
· MC cuts AC at its minimum point (here S)
EXAMPLE
Question-

Classmate Ltd produces x quantity of commodity. The cost


function given is C(x)= 3x²-6x+5

Find out-

1. Average cost

2. Marginal Cost

3. AC and MC when x=2

Solution:

1. AC= C(x)/x

=(3x²-6x+5)/x

=3x-6+5/x

2. MC= d [C(x)] / dx

= d[3x²-6x+5]/dx

MC= 6x-6

3. AC=3*2-6+5/2

AC= 6-6+2.5

AC=2.5 when x=2

MC= 6*2-6

AC=6 when x=2


Reflection
I have learnt a lot about cost, average cost and marginal
costs in this project.
This project brings about a relationship between
marginal costs and average costs. Although not included
in the project I have learnt not only about above given
costs but also several other costs concepts. This project
also will help me with various other subjects like
commerce where we have to try to forecast profit by cost
cutting and economics where we study about factor
costs.
The deep study of this project will always be beneficial
for me.
BIBLIOGRAPHY
· ISC Mathematics by OP Malhotra
· Frank Economics textbook
· Allbusiness.com

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