Home › CA Foundation › Business Economics › Price-Output Determination under Different Market Forms › A price-taking firm has total cost of ₹ 100 at z…
A price-taking firm has total cost of ₹ 100 at zero output, ₹ 210 at 10 units, and ₹ 300 at 20 units. What is the marginal cost per unit over the range 10 to 20 units?
A₹ 9
B₹ 11
C₹ 90
D₹ 15
Answer & Solution
Correct answer: A. ₹ 9
1. Marginal cost is the change in total cost divided by the change in output.
2. TC rises from ₹ 210 to ₹ 300 as output rises from 10 to 20 units.
3. Change in TC = 300 - 210 = ₹ 90 for 10 extra units.
4. MC per unit = 90 / 10 = ₹ 9.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit III "Price-Output Determination under Different Market Forms", p.8_
Related questions
A firm is currently at an output where MR > MC. To maximise profit, the firm should:When a dominant low-cost firm sets the price and the smaller fringe firms simply accept anA market structure in which there is a single buyer of a product or factor service is knowA group of firms that explicitly agree to coordinate price and output to act jointly like Under the kinked demand curve model, the segment of the demand curve above the prevailing The kinked demand curve hypothesis, proposed by Paul Sweezy, is mainly used to explain:The single most important feature that distinguishes oligopoly from other market forms is:Under monopolistic competition, firms compete largely through non-price methods. The main