If the total cost increases from Rs 500 to Rs 600 as production rises from 20 to 30 units, and fixed costs amount to Rs 200, which statement is correct?

Show Answers

The marginal cost equals Rs 20The average cost decreasesThe variable cost increases by Rs 100The average fixed cost is Rs 10

Explanation

Given the total cost rises by Rs 100 when output increases by 10 units, the variable cost must have increased by Rs 100. Fixed costs remain constant at Rs 200, so the change in total cost reflects the change in variable cost.