A contractor purchases a piece of equipment for $26,000. The equipment requires

Question

A contractor purchases a piece of equipment for $26,000.
The equipment requires an average expenditure of $9.25 per hour for fuel and main-
tenance, and the operator is paid $15.50 per hour to operate the machinery.
a) Assuming that the total cost, C(h) , is linearly related to the number of hours,
h, that the machine is operated, write an equation for the cost function.
b) The average cost per hour of operating the machine is given by C(h) = C(h)/
h .
Find the average cost function.
c) What cost per hour does the average cost per hour tend to as the number of
hours of use increases? (Hint: Plug in a large number into the average cost func-
tion.)

Explanation / Answer

a) Cost function: C(x) = 26000 + 9.25x

b) Average cost: C(h) = 26000/h + 9.25

c) lim() of C(h) = 9.25

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