A small machine shop manufactures drill bits used in the petroleum industry. The manager estimates that the total daily cost (in dollars) of producing X bits is the cost function
C(X) = 1600 + 0.23X2
where X is the number of bits produced and $1600 is the daily fixed cost and $0.23X is the variable cost per unit. The manager has set a production goal to produce the number of bits per day which will keep the average cost per bit as low as possible.
