It is known that the cost of producing 50 units of a commodity is ₹250 and cost of producing 100 units is 350. Assuming average variable cost is fixed, cost function will be |
$(100+2 x)$ $(150+2 x)$ $(150+3 x)$ $(200+2 x)$ |
$(150+2 x)$ |
Let the cost function be $C = a + bQ$ Since average variable cost is fixed, $b$ is constant. Given $C(50)=250$ $C(100)=350$ Subtract $350-250 = b(100-50)$ $100 = 50b$ $b = 2$ Now find $a$ $250 = a + 2(50)$ $250 = a + 100$ $a = 150$ The cost function is $C = 150 + 2Q$ |