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April 16, 2014

April 16, 2014

Posted by **Kiersyn** on Tuesday, February 9, 2010 at 8:01am.

- Managerial Economics -
**dongo**, Tuesday, February 9, 2010 at 8:04amA so-called cubic function is nothing else than a polynomial function of degree 3.

f(x)=ax^3+bx^2+cx+d, where a,b,c,d are fixed, but not determined constant coefficients, imposed the condition a != 0.

- Managerial Economics -
**Kiersyn**, Tuesday, February 9, 2010 at 9:56amWow, this definition is like greek. What is a polynomial function of degree 3? I know what a constant is and also a coefficent. But what is "imposed the condition a!=0? Can someone explain this in a simpler way that doesn't involve algebra or calculus? Thanks

- Managerial Economics -
**Greek needed**, Thursday, February 3, 2011 at 12:59pmBasically, the point of cubic is that you can use the cube (third power) of the number of things produced to predict the total cost of making that many things. It so happens that x^3 (x cubed) very nicely represents certain economies/not of scale in production; it "looks right".

So the whole point is that some algebra can provide a nice formula that approximates the reality of cost functions for which marginal cost (the cost of "making one more") first goes down, then goes up. And some calculus can confirm it.

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