The following statements are made on the basis of given graph.
A. OB represents the cost function.
B. MA represents the cost function.
C. Loss occurs at x = 5.
D. Loss occurs at x = 15.
E. Profit occurs at x = 10.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (3) → B and E only
$\text{OB passes through origin} \Rightarrow \text{Revenue function}$
$\text{MA has positive intercept} \Rightarrow \text{Cost function}$
$\text{Intersection at } x=10 \Rightarrow \text{Break-even}$
$x<10 \Rightarrow \text{Cost > Revenue} \Rightarrow \text{Loss}$
$x>10 \Rightarrow \text{Revenue > Cost} \Rightarrow \text{Profit}$
$\text{Check statements:}$
$\text{A: False}$
$\text{B: True}$
$\text{C: True}$
$\text{D: False}$
$\text{E: No profit exactly at } x=10 \Rightarrow \text{False}$
Correct statements are B and C.