Cost

A cost function indicates to the monopolist how much it costs to produce a given quantity.

Example

To produce a quantity Q of lemonade, it costs Zoe $$C \left( Q \right) = 2Q$$ If she makes 2 liters of lemonade, it will cost her $$C \left( 2 \right) = 2 \times 2 = 4$$

Question

Zoe's cost function is $$C \left( Q \right) = 1 Q + 74$$ How much does it cost to produce 9 liters of lemonade?

Plug `Q = 9` into `C \left( Q \right) = 1 Q + 74` \begin{align*} C \left( Q \right) &= 1 Q + 74 \\ &= 1 \times 9 + 74 \\ &= 9 + 74 \\ &= 83 \end{align*}