There are five levels {P, Q, R, S, T} in a linear supply chain before a product reaches customers, as shown in the figure.At each of the five levels, the price of the product is increased by 25%. If the product is produced at level P at the cost of Rs. 120 per unit, what is the price paid (in rupees) by the customers?a)187.50b)234.38c)292.96d)366.21Correct answer is option 'D'. Can you explain this answer?

Question

Answer

Concept:

Price paid by customer at end = initial cost × (increased percentage)ⁿ

Where,

n = no. of levels

Calculation:

Given:

Cost of product at first level P = 120 Rupees.

Also,

It is increased by 25% in each level.

Hence,

Initial cost = 120 Rupees.,

Increased percentage = 25%,

n = 5

Now,

Price paid by customer at end = 120 × 1.25⁵ Rupees

∴ Price paid by customer at end = 366.21 Rupees.

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Q. No. 1– 5Carry One Mark EachThe cost function for a product in a firm is given by 2 5q , where q is the amount of production. The firm can sell the product at a market price of Rs.50 per unit. The number of units to be produced by the firm such that the profit is maximized is

The cost function for a product in a firm is given by 5q2, where q is the amount of production. Thefirm can sell the product at a market price of Rs. 50 per unit. The number of units to be produced bythe firm such that the profit is maximized is

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