Each machine at a certain factory can produce 90 units per hour. The setup cost is 20 dollars for each machine and the operating cost is 26 dollars per hour (total, not 26 dollars per machine per hour). You would like to know how many machines should be used to produce 40000 units, with the goal of minimizing production costs. First, find a formula for the total cost in terms of the number of machines, n:
TC =
machines for a total cost of The minimum total cost is achieved when using dollars.