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Suppose the total cost production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?
- a)Rs. 90,000
- b)Rs. 65,000
- c)Rs. 1, 00,000
- d)Rs. 60,000
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
Suppose the total cost production of a commodity ‘x’ is Rs...
125000-25000-35000 = 65000 = explicit cost.
Total cost = implicit cost + explicit cost.
Total cost = implicit cost + explicit cost.
Most Upvoted Answer
Suppose the total cost production of a commodity ‘x’ is Rs...
Is given by the equation:
TC = 1000 + 10Q + 0.5Q^2
Where TC is the total cost of production, Q is the quantity of the commodity produced.
a) Find the marginal cost function.
To find the marginal cost function, we need to take the derivative of the total cost function with respect to Q:
MC = dTC/dQ = 10 + Q
So the marginal cost function is MC = 10 + Q.
b) Find the average cost function.
To find the average cost function, we need to divide the total cost function by the quantity produced:
AC = TC/Q = (1000 + 10Q + 0.5Q^2)/Q
Simplifying this expression, we get:
AC = 1000/Q + 10 + 0.5Q
So the average cost function is AC = 1000/Q + 10 + 0.5Q.
c) Find the quantity that minimizes average cost.
To find the quantity that minimizes average cost, we need to take the derivative of the average cost function with respect to Q and set it equal to zero:
dAC/dQ = -1000/Q^2 + 0.5
-1000/Q^2 + 0.5 = 0
-1000/Q^2 = -0.5
Q^2 = 2000
Q = sqrt(2000) = 44.72
So the quantity that minimizes average cost is approximately 44.72 units.
d) Find the minimum average cost.
To find the minimum average cost, we substitute the quantity found in part c) into the average cost function:
AC = 1000/44.72 + 10 + 0.5(44.72) = 32.23
So the minimum average cost is approximately $32.23 per unit.
TC = 1000 + 10Q + 0.5Q^2
Where TC is the total cost of production, Q is the quantity of the commodity produced.
a) Find the marginal cost function.
To find the marginal cost function, we need to take the derivative of the total cost function with respect to Q:
MC = dTC/dQ = 10 + Q
So the marginal cost function is MC = 10 + Q.
b) Find the average cost function.
To find the average cost function, we need to divide the total cost function by the quantity produced:
AC = TC/Q = (1000 + 10Q + 0.5Q^2)/Q
Simplifying this expression, we get:
AC = 1000/Q + 10 + 0.5Q
So the average cost function is AC = 1000/Q + 10 + 0.5Q.
c) Find the quantity that minimizes average cost.
To find the quantity that minimizes average cost, we need to take the derivative of the average cost function with respect to Q and set it equal to zero:
dAC/dQ = -1000/Q^2 + 0.5
-1000/Q^2 + 0.5 = 0
-1000/Q^2 = -0.5
Q^2 = 2000
Q = sqrt(2000) = 44.72
So the quantity that minimizes average cost is approximately 44.72 units.
d) Find the minimum average cost.
To find the minimum average cost, we substitute the quantity found in part c) into the average cost function:
AC = 1000/44.72 + 10 + 0.5(44.72) = 32.23
So the minimum average cost is approximately $32.23 per unit.
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Community Answer
Suppose the total cost production of a commodity ‘x’ is Rs...
1,25,000-25000-35000=65000
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Suppose the total cost production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option 'B'. Can you explain this answer?
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Suppose the total cost production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option '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 production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option '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 production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option 'B'. Can you explain this answer?.
Suppose the total cost production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option '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 production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option '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 production of a commodity ‘x’ is Rs. 1, 25,000 out of which Implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What would be the explicit cost of commodity x?a)Rs. 90,000b)Rs. 65,000c)Rs. 1, 00,000d)Rs. 60,000Correct answer is option 'B'. Can you explain this answer?.
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