The average cost per unit at production level x is defined as C_avg(x) = C(x)/x, where C(x) is the cost of producing x units. Average cost is a measure of the efficiency of the production process.

The cost in dollars of producing alarm clocks is given by C(x) = 50x³ − 750x² + 3740x + 3750, where x is in units of 1000.
(a) Calculate the average cost at x = 4, 6, 8, and 10.
(b) Use the graphical interpretation of average cost to find the production level x₀ at which average cost is lowest. What is the relation between average cost and marginal cost at x₀ (see Figure 16)?

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