A company produces a commodity with ₹36,000 as a fixed cost. The variable cost is estimated to be…
A company produces a commodity with ₹36,000 as a fixed cost. The variable cost is estimated to be 25% of the total revenue earned. The selling price of the product is ₹20 per unit.
Find the following:
(a)[1.0]
Cost function
(b)[1.0]
Profit function
Answer
Answer (a)
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Fixed cost $= ₹36,000$.
Selling price per unit $= ₹20$.
Total revenue for $x$ units: $R(x) = 20x$.
Variable cost $= 25\%$ of total revenue $= 0\cdot 25 \times 20x = 5x$.
Cost function: $C(x) = \text{Fixed Cost} + \text{Variable Cost} = 36000 + 5x$ (or $5x + 36000$).
Answer (b)
AIWritten by AI (gemini-2.5-pro) - it can contain mistakes.
Profit function:
$P(x) = R(x) - C(x) = 20x - (36000 + 5x) = 15x - 36000$.
From ISC 2026 Mathematics Paper 1, question 20(i).