Direction.
Directions: Answer the questions based on the following information:
ABC Ltd. Produces widgets for which the demand is unlimited and they can sell all of their production. The graph below describes the monthly variable costs incurred by the company as a function of the quantity produced. In addition, operating the plant for one shift results in a fixed monthly cost of Rs. 800. Fixed monthly costs for second shift operation are estimated at Rs. 1200. Each shift operation provides capacity for producing 30 widgets per month.
Note: Average unit cost, AC = Total monthly cost / monthly production, and Marginal cost, MC is the rate of change in total cost for unit change in quantity produced.
From the data provided it can be inferred that, for production levels in the range of 0 to 60 units,
MC in an increasing function of producing quantity.
MC is a decreasing function of production quantity.
Initially MC is a decreasing function of production quantity, attains a minimum and then it is an increasing function of production quantity.
None of the above
Correct Answer :
D. None of the above
To find the trend we will find the MC in different interval of production
MC between 1 to 6 units = (1100 850)/5 = 50
MC between 16 to 21 units = (2300 1800)/5 = 100
MC between 26 to 30 units = ( 3150 2700)/4 =112.5
MC between 30 to 31 units = (4500 3150)/1 = 1350
MC between 31 to 36 units = (500 4500) /5 = 100
As can be seen the MC is an increasing function for a period and then it is a decreasing function hence none of the above given statements is true.
Related Questions
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4 : 2 : 3
6 : 1 : 21
45 : 24 : 31.5
Cannot be determined
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5,000
5,800
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Potassium Chlorate at 80°C.
Potassium Chloride at 35°C.
Potassium Nitrate at 39°C.
Sodium Chloride at 85°C.
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110
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4 : 11
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April
May
June
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Both school-A and school-B
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7.3
7.7
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1990 91
1991 92
1992 93
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2000
2001
1998
1996
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A
B
C
D
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42,78,000
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Pearl
Sapphire
Ruby
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Pearl
Ruby
Topaz
Sapphire
Total number of girls enrolled in all the three schools in the year 2004 was what percentage of the number of girls enrolled in school-C in the year 2007?
208
230
200
225
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0
1
2
3
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Profitability is non-increasing during the five years from 1994-95 to 1998-99.
Profitability remained constant during the five years from 1994-95 to 1998-99.
None of the above
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1993
1994
1995
1996
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0
1
2
3
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1991
1992
1993
1994
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3.27%
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1.5%
2%
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Ram
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D
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245
237
263
300