Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Calculus

Question:

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

Options:

$(100+2 x)$

$(150+2 x)$

$(150+3 x)$

$(200+2 x)$

Correct Answer:

$(150+2 x)$

Explanation:

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

$C = 150 + 2Q$