1.
Find the derivative of the cost function:
$$ C(x) = 500x + 10000x^{-1} $$
$$ C'(x) = 500 - 10000x^{-2} = 500 - \frac{10000}{x^2} $$
2.
Find the critical number: Set $C'(x)=0$.
$$ 500 = \frac{10000}{x^2} \implies x^2 = \frac{10000}{500} = 20 $$
$$ x = \sqrt{20} \approx 4.47 $$
3.
Consider the integer domain: Since the number of clinics must be an integer, the minimum must occur at one of the integers closest to the critical value of $4.47$. We need to test $x=4$ and $x=5$.
- $C(4) = 500(4) + \frac{10000}{4} = 2000 + 2500 = \$4500$
- $C(5) = 500(5) + \frac{10000}{5} = 2500 + 2000 = \$4500$
Both 4 and 5 clinics result in the same minimum cost of \$4500. The second derivative, $C''(x) = \frac{20000}{x^3}$, is positive for $x > 0$, confirming that the function is concave up and our critical point is a minimum.