The average cost function of producing and marketing 'x' units is given by $AC=2 x-20+\frac{50}{x}$. Then the value of the output x, for which the total cost is increasing is: |
x > 10 x < 5 x < 10 x > 5 |
x > 5 |
The correct answer is Option (4) → x > 5 $AC = 2x - 20 + \frac{50}{x}$ $\text{Total cost } TC = x \cdot AC$ $TC = x\left(2x - 20 + \frac{50}{x}\right)$ $TC = 2x^2 - 20x + 50$ $\frac{d(TC)}{dx} = 4x - 20$ $TC \text{ is increasing when } \frac{d(TC)}{dx} > 0$ $4x - 20 > 0$ $x > 5$ The total cost is increasing for $x > 5$. |