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Suppose the total cost of production of commodity ‘X’ is Rs. 1, 25,000 Out of other cost implicit is Rs. 35,000 and normal profit is Rs. 25,000 what will be the explicit cost of commodity ‘X’?
  • a)
    Rs. 60,000
  • b)
    Rs. 65,000
  • c)
    Rs. 90,000
  • d)
    Rs. 80,000
Correct answer is 'B'. Can you explain this answer?
Most Upvoted Answer
Suppose the total cost of production of commodity ‘X’ is R...
X is given by the function C(x) = 1000 + 2x, where x is the quantity of commodity X produced. The marginal cost of production (MC) is the derivative of the total cost function with respect to x, which is given by MC = dC(x)/dx = 2.

This means that the marginal cost of production of commodity X is constant and equal to 2. This implies that every additional unit of commodity X produced incurs an additional cost of $2. For example, if the company produces 100 units of commodity X, the total cost of production is C(100) = 1000 + 2(100) = $1200. If the company decides to produce one more unit of commodity X, the total cost of production will increase to C(101) = 1000 + 2(101) = $1202, which means that the marginal cost of production for the 101st unit is $2.

Knowing the marginal cost of production is important for businesses because it helps them make decisions about how much to produce. If the price of commodity X is higher than the marginal cost of production, the company can increase its profit by producing more units. However, if the price of commodity X is lower than the marginal cost of production, the company will incur a loss by producing additional units. Therefore, businesses need to find the right balance between the price of their product and the cost of production to maximize their profits.
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Suppose the total cost of production of commodity ‘X’ is R...
125000-25000(profits)=100000(production cost) 100000-35000(implicit cost)=65000(explicit cost)
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Suppose the total cost of production of commodity ‘X’ is Rs. 1, 25,000 Out of other cost implicit is Rs. 35,000 and normal profit is Rs. 25,000 what will be the explicit cost of commodity ‘X’?a)Rs. 60,000b)Rs. 65,000c)Rs. 90,000d)Rs. 80,000Correct answer is 'B'. Can you explain this answer?
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Suppose the total cost of production of commodity ‘X’ is Rs. 1, 25,000 Out of other cost implicit is Rs. 35,000 and normal profit is Rs. 25,000 what will be the explicit cost of commodity ‘X’?a)Rs. 60,000b)Rs. 65,000c)Rs. 90,000d)Rs. 80,000Correct answer is 'B'. Can you explain this answer? 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 Suppose the total cost of production of commodity ‘X’ is Rs. 1, 25,000 Out of other cost implicit is Rs. 35,000 and normal profit is Rs. 25,000 what will be the explicit cost of commodity ‘X’?a)Rs. 60,000b)Rs. 65,000c)Rs. 90,000d)Rs. 80,000Correct answer is 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose the total cost of production of commodity ‘X’ is Rs. 1, 25,000 Out of other cost implicit is Rs. 35,000 and normal profit is Rs. 25,000 what will be the explicit cost of commodity ‘X’?a)Rs. 60,000b)Rs. 65,000c)Rs. 90,000d)Rs. 80,000Correct answer is 'B'. Can you explain this answer?.
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