Question

The level of output and total cost of production of a product is given below:

Level of production	Total cost of production
0	20000
100	620,000
150	9,20,000
180	11,00,000

Find the average cost of production of 150 units___.

• A. Rs. 6133.33
• B. Rs. 6233
• C. Rs.6000
• D. Rs. 6230

Answer 1

The correct option is A Rs. 6133.33

AT 150 units TC is 9,20,000

To get AC we use the below formula:

AC = $\frac{TC}{Q}$

= $\frac{9,20,000}{150}$

= 6133.33