CMA Final · Strategic Cost Management · Business Application of Maxima and Minima
A Pune firm's total cost function is C(x) = 2x² + 40x + 1,800 (in rupees) for x units. What is the marginal cost at x = 15 units?
Marginal cost is the first derivative of the total cost function. Differentiating 2x² + 40x + 1,800 gives 4x + 40, and at 15 units this equals Rs 100. The fixed cost of Rs 1,800 disappears on differentiation.
- ARs 70Correct
- BRs 100
- CRs 40
- DRs 2,700
Explanation
Marginal cost is the derivative: C'(x) = 4x + 40. At x = 15, MC = 60 + 40 = 100. Check: the option Rs 70 would result from using 2x instead of 4x, so it is wrong; let me restate: 4(15)=60, plus 40 gives 100, so the correct value is Rs 100.
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