1. **State the problem:** We are given the cost function $$c(x) = x^3 - 6x^2 + 15x$$ where $x$ represents thousands of units produced. We want to find if there is a production level $x$ that minimizes the average cost, and if so, find that $x$.
2. **Recall the formula for average cost:** The average cost function $A(x)$ is given by dividing the total cost by the number of units produced:
$$A(x) = \frac{c(x)}{x}$$
for $x > 0$.
3. **Write the average cost function:**
$$A(x) = \frac{x^3 - 6x^2 + 15x}{x}$$
Simplify by canceling $x$:
$$A(x) = \frac{\cancel{x}(x^2 - 6x + 15)}{\cancel{x}} = x^2 - 6x + 15$$
4. **Find critical points of $A(x)$:** To minimize $A(x)$, find where its derivative is zero.
Calculate the derivative:
$$A'(x) = \frac{d}{dx}(x^2 - 6x + 15) = 2x - 6$$
5. **Set derivative equal to zero and solve:**
$$2x - 6 = 0$$
$$2x = 6$$
$$x = 3$$
6. **Check if this critical point is a minimum:**
Calculate the second derivative:
$$A''(x) = \frac{d}{dx}(2x - 6) = 2$$
Since $$A''(3) = 2 > 0$$, the function is concave up at $x=3$, so $x=3$ is a minimum point.
7. **Interpret the result:** The production level that minimizes average cost is $x=3$, which means 3000 units.
**Final answer:** The production level that minimizes average cost is $$\boxed{3}$$ (thousands of units).
Average Cost Minimum 716E04
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