To calculate the marginal average cost, we need to first calculate the average cost,

where *TC*(*Q*) is the total cost to produce *Q* units. Once we have the the average cost function, the marginal average cost is simply its derivative,

Example Suppose the total cost (in thousands of dollars) to produce Q units is

a. Find the the average cost of producing 40 units.

b. Find the average cost function .

c. Find the marginal average cost function .

d. Find and interpret