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The total cost of production of 10 units is Rs.200. When production is increased to 20 units its total cost becomes Rs.600. what will be its marginal cost?
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The total cost of production of 10 units is Rs.200. When production is...
Introduction:
The marginal cost is the additional cost incurred by producing one more unit of a product. It helps businesses determine the most efficient level of production and pricing strategies. In this case, we are given the total cost of producing 10 units and 20 units of a product. We need to calculate the marginal cost.

Given:
- Cost of producing 10 units = Rs.200
- Cost of producing 20 units = Rs.600

Calculating the Total Cost per Unit:
To calculate the marginal cost, we first need to determine the total cost per unit for producing 10 units and 20 units.

- Total cost per unit for 10 units = Total cost / Number of units
Total cost per unit for 10 units = Rs.200 / 10 units
Total cost per unit for 10 units = Rs.20 per unit

- Total cost per unit for 20 units = Total cost / Number of units
Total cost per unit for 20 units = Rs.600 / 20 units
Total cost per unit for 20 units = Rs.30 per unit

Calculating the Marginal Cost:
The marginal cost can be calculated by finding the difference between the total cost per unit for 20 units and 10 units.

- Marginal cost = Total cost per unit for 20 units - Total cost per unit for 10 units
Marginal cost = Rs.30 per unit - Rs.20 per unit
Marginal cost = Rs.10 per unit

Explanation:
The marginal cost of production is Rs.10 per unit. This means that producing one additional unit of the product incurs an additional cost of Rs.10. The marginal cost helps businesses make decisions regarding production levels and pricing strategies. By comparing the marginal cost with the selling price, businesses can determine whether it is profitable to produce an additional unit and set appropriate prices to maximize profits.

Conclusion:
The marginal cost of production is an essential metric for businesses to determine the additional cost incurred by producing one more unit of a product. In this case, the marginal cost is Rs.10 per unit, indicating that the cost of producing an additional unit is Rs.10. By considering the marginal cost, businesses can make informed decisions regarding production levels and pricing strategies.
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The total cost of production of 10 units is Rs.200. When production is increased to 20 units its total cost becomes Rs.600. what will be its marginal cost?
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The total cost of production of 10 units is Rs.200. When production is increased to 20 units its total cost becomes Rs.600. what will be its marginal cost? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The total cost of production of 10 units is Rs.200. When production is increased to 20 units its total cost becomes Rs.600. what will be its marginal cost? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The total cost of production of 10 units is Rs.200. When production is increased to 20 units its total cost becomes Rs.600. what will be its marginal cost?.
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