PRC-2 · Chapter 2 · Question 16 of 45
Assuming a linear cost relationship, if the total cost of producing 10 units is Rs. 250 and the cost of 15 units is Rs. 350, what is the estimated cost of producing 20 units?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 450
Explanation
First, find the variable cost (slope): (350 - 250) / (15 - 10) = 100 / 5 = Rs. 20 per unit. Fixed cost is 250 - (10 * 20) = Rs. 50. The cost function is C = 20x + 50. For 20 units, C = 20(20) + 50 = Rs. 450.
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