ABC Ltd. produces widgets for which the demand is unlimited and they can sell all of their production.The graph below describes the monthly variable costs incurred by the company as a function of the quantity produced. In addition, operating the plant for one shift results in a fixed monthly cost of Tk. 800. fixed monthly costs for second shift operation are estimated at Tk. 1200. Each shift operation provides capacity for production 30 widgets per month.
Note : Average unit cost, AC = Total monthly costs/ monthly production, and marginal cost, MC is the rate of change in total cost for unit change in quality produced.
Suppose that each widget sells for Tk, 150. What is the profit earned by ABC Ltd. in July? (Profit is defined as the excess of sales revenue over total cost.)
400 | |
0 | |
1600 | |
2400 |