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CAT 1998 — DILR Question 33

Bar GraphsEasy
Passage / Data

Direction: Answer the questions based on the following information.

Ghosh Babu has a manufacturing unit. The following graph gives the cost for various number of units. Given: Profit = Revenue – Variable cost – Fixed cost. The fixed cost remains constant up to 34 units after which additional investment is to be done in fixed assets. In any case, production cannot exceed 50 units.

If at the most 40 units can be manufactured, then what is the number of units that can be manufactured to maximise profit per unit?

Answer & solution

  • A

    40

  • 34

  • C

    35

  • D

    25

Solution

Let us verify for the given options.

​​​​​​​

Hence, we can see that to maximise profit per unit, we need to manufacture 34 units.

CAT 1998 DILR Q33: If at the most 40 units can be manufactured, then what is the number of units that can be manufactured to maxi — Solution | TheCATExam