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Rate of Change, Marginal Cost and Marginal Revenue for CUET Applied Maths

About 5 min to learn · 79 questions

Rate of change, marginal cost and marginal revenue are part of Section B2 of CUET Maths, the Applied Mathematics section you answer if you choose Applied Mathematics instead of Section B1. They are derivatives put to work in business, so the calculus you already know from Section A does most of the job. Learn each idea here, from areas and volumes changing with time to cost, revenue and profit functions, marginal cost, marginal revenue and maximising profit, with worked examples, time-saving shortcuts and the traps CUET sets, then practise on free questions in CUET's own formats, each fully solved.

Syllabus area
Section B2: Applied Mathematics
On this page · 10 sections
  1. 01Rate of change of a quantity
  2. 02Cost, revenue and profit functions
  3. 03Marginal cost
  4. 04Marginal revenue
  5. 05Maximising profit and revenue
  6. 06How CUET asks this chapter
  7. 07Exam shortcuts
  8. 08Common mistakes
  9. 09Quick revision
  10. 10Check your understanding

Rate of change of a quantity

A small bakery sells cakes. The more it bakes, the more it spends and the more it earns, and the owner wants to know how each extra cake changes those totals. That question, how fast one quantity changes as another does, is a derivative, and this chapter applies it to everyday quantities and to business.

What is the rate of change of a quantity?

If y=f(x)y = f(x), then dydx\frac{dy}{dx} is the rate at which yy changes as xx changes. When both depend on time, the chain rule links their rates: dydt=dydx×dxdt\frac{dy}{dt} = \frac{dy}{dx} \times \frac{dx}{dt}.

Example 1 · A growing square

The side of a square grows at 0.5 cm/s. How fast is its area growing when the side is 8 cm?

  1. A=x2A = x^{2}, so dAdt=2xdxdt\frac{dA}{dt} = 2x \frac{dx}{dt}.

  2. =2×8×0.5=8= 2 \times 8 \times 0.5 = 8 cm²/s.

Answer

8 cm²/s.

Cost, revenue and profit functions

What are the cost, revenue and profit functions?

For xx units, the cost C(x)C(x) is the fixed cost C(0)C(0) plus the variable cost; the revenue is R(x)=pxR(x) = px, price times quantity; and the profit is P(x)=R(x)−C(x)P(x) = R(x) - C(x). The average cost is C(x)x\frac{C(x)}{x}, and the break-even point is where R(x)=C(x)R(x) = C(x).

When the price falls as more is sold, the demand function p=f(x)p = f(x) gives the price, and the revenue is x×f(x)x \times f(x). For the bakery, cakes sell at p=70−xp = 70 - x rupees when xx are sold a day, so R(x)=70x−x2R(x) = 70x - x^{2}.

Marginal cost

What is marginal cost?

Marginal cost is the derivative of total cost, MC=C′(x)MC = C'(x). It is close to the cost of making one more unit when xx units are already being made, the (x+1)(x + 1)th.

The bakery's daily cost is C(x)=200+10x+x2C(x) = 200 + 10x + x^{2}, so MC=10+2xMC = 10 + 2x. At 15 cakes, MC=40MC = 40: the sixteenth cake costs about ₹40 more.

Watch out

Marginal cost is not the average cost. At 15 cakes the average is C(15)15=57515≈38.3\frac{C(15)}{15} = \frac{575}{15} \approx 38.3 rupees, but each extra cake costs about ₹40.

Marginal revenue

What is marginal revenue?

Marginal revenue is the derivative of total revenue, MR=R′(x)MR = R'(x), the extra revenue from selling one more unit. If every unit sells at a fixed price, MRMR equals that price; if the price falls with sales, MRMR is less than the price.

For the bakery, R(x)=70x−x2R(x) = 70x - x^{2} gives MR=70−2xMR = 70 - 2x. At 15 cakes the price is ₹55 but MR=40MR = 40: selling one more cake lowers the price of the others too.

Maximising profit and revenue

At what output is profit greatest?

Profit P=R−CP = R - C is greatest where P′(x)=0P'(x) = 0, that is where marginal revenue equals marginal cost, provided P′′(x)<0P''(x) < 0 there. Revenue alone is greatest where MR=0MR = 0, and average cost is least where it equals marginal cost.

Example 2 · The bakery's best output

With R(x)=70x−x2R(x) = 70x - x^{2} and C(x)=200+10x+x2C(x) = 200 + 10x + x^{2}, how many cakes give the greatest profit, and what is it?

  1. MR=MCMR = MC: 70−2x=10+2x70 - 2x = 10 + 2x, so x=15x = 15. And P′′(x)=−4<0P''(x) = -4 < 0, a maximum.

  2. P(15)=(1,050−225)−(200+150+225)=825−575=250P(15) = (1{,}050 - 225) - (200 + 150 + 225) = 825 - 575 = 250 rupees.

Answer

15 cakes a day, for a profit of ₹250.

How CUET asks this chapter

  • Rates: the rate of change of an area, a volume or a quantity over time.
  • Functions: profit, revenue from a demand function, average cost, break-even.
  • Marginal values: MC or MR at a given output, the next unit's cost, where MC is least or MR is zero.
  • Optimising: the output for greatest profit, the greatest profit, the price for greatest revenue, the least average cost.

Exam shortcuts

  • MC=C′(x)MC = C'(x), MR=R′(x)MR = R'(x), R=x×pR = x \times p.
  • Greatest profit: MR=MCMR = MC with P′′<0P'' < 0.
  • Greatest revenue: MR=0MR = 0.
  • Least average cost: AC=MCAC = MC.

Common mistakes

  • Giving the total or the average cost when the marginal cost is asked.
  • Using the price as the marginal revenue when the price falls with sales.
  • Maximising revenue when profit is asked.
  • Forgetting the fixed cost in profit.

Quick revision

Rates and marginals

  • dydt=dydx×dxdt\frac{dy}{dt} = \frac{dy}{dx} \times \frac{dx}{dt}
  • MC=C′(x)MC = C'(x), MR=R′(x)MR = R'(x)

Optimising

  • Profit: MR=MCMR = MC
  • Revenue: MR=0MR = 0
  • Average cost: AC=MCAC = MC

Next in Section B2: integration in economics, in consumer and producer surplus.

Next · 09Quick revision

Check your understanding

79 questions, grouped by type, easy to hard. Pick an answer and check it. The worked solution opens when you ask for it.

Rate of change of a quantityQ1 of 79Q1

Rate of change of a quantity

17 questions

The radius of a circle grows at 2 cm/s. How fast is its area growing when the radius is 5 cm?

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AnswerC · 20π20 \pi cm²/s

  1. A=πr2A = \pi r^{2}, so dAdt=2πrdrdt\frac{dA}{dt} = 2\pi r \frac{dr}{dt}.

  2. =2π×5×2=20π= 2\pi \times 5 \times 2 = 20\pi cm²/s.

Worth noting

10π10\pi leaves out drdt=2\frac{dr}{dt} = 2: it is the rate per cm of radius, not per second.

What is the rate of change of the area of a circle with respect to its radius when the radius is 6 cm?

Options for question 2

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AnswerB · 12π12 \pi cm²/cm

  1. dAdr=ddr(πr2)=2πr\frac{dA}{dr} = \frac{d}{dr}(\pi r^{2}) = 2\pi r.

  2. At r=6r = 6: 12π12\pi cm² for each cm of radius.

Worth noting

36π36\pi is the area itself, not how fast it changes.

A shop's total sales tt months after opening are S(t)=200t+5t2S(t) = 200t + 5t^{2} units. At what rate are sales growing at t=4t = 4?

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AnswerC · 240 units a month

  1. The rate is S′(t)=200+10tS'(t) = 200 + 10t.

  2. At t=4t = 4: 200+40=240200 + 40 = 240 units a month.

Worth noting

880 is S(4)S(4), the total sold, not the rate.

The total revenue from selling xx units is R(x)=3x2+36x+5R(x) = 3x^{2} + 36x + 5 rupees. What is the rate of change of revenue with respect to xx at x=5x = 5?

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AnswerC · ₹66

  1. R′(x)=6x+36R'(x) = 6x + 36.

  2. R′(5)=30+36=66R'(5) = 30 + 36 = 66 rupees per unit.

Worth noting

₹260 is R(5)R(5), the revenue itself.

Each side of a square grows at 3 cm/s. How fast is its perimeter growing?

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AnswerD · 12 cm/s

  1. P=4aP = 4a, so dPdt=4dadt\frac{dP}{dt} = 4\frac{da}{dt}.

  2. 4×3=124 \times 3 = 12 cm/s, whatever the size of the square.

Worth noting

3 cm/s is one side's rate; four sides grow at once.

What is the rate of change of the volume of a sphere with respect to its radius when the radius is 2 cm?

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AnswerB · 16π16 \pi cm³ per cm

  1. dVdr=ddr(43πr3)=4πr2\frac{dV}{dr} = \frac{d}{dr}\left(\frac{4}{3}\pi r^3\right) = 4\pi r^2.

  2. At r=2r = 2: 16π16\pi cm³ per cm.

Worth noting

323π\frac{32}{3}\pi is the volume itself at r=2r = 2, not its rate of change.

Each edge of a cube grows at 3 cm/s. How fast is its volume growing when an edge is 4 cm long?

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AnswerC · 144 cm³/s

  1. V=a3V = a^{3}, so dVdt=3a2dadt\frac{dV}{dt} = 3a^{2} \frac{da}{dt}.

  2. =3×16×3=144= 3 \times 16 \times 3 = 144 cm³/s.

Worth noting

48 cm³/s is 3a23a^{2} alone, the rate per cm of edge.

The population of a town tt years from now is P(t)=1,000+20t+t2P(t) = 1{,}000 + 20t + t^{2}. At what rate is it growing when t=5t = 5?

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AnswerA · 30 people a year

  1. The rate of growth is P′(t)=20+2tP'(t) = 20 + 2t.

  2. P′(5)=20+10=30P'(5) = 20 + 10 = 30 people a year.

Worth noting

1,125 is the population at t=5t = 5, not its rate of growth.

Read the two statements and choose the correct option.

I. If y=f(x)y = f(x), then dydx\frac{dy}{dx} at x=ax = a is the rate of change of yy with respect to xx at x=ax = a.

II. If xx and yy both change with time, dydt=dydx+dxdt\frac{dy}{dt} = \frac{dy}{dx} + \frac{dx}{dt}.

Options for question 9

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AnswerA · Only I

  1. I is what a derivative means. True.

  2. II: the chain rule multiplies, dydt=dydx×dxdt\frac{dy}{dt} = \frac{dy}{dx} \times \frac{dx}{dt}. False.

The area of a circle grows at 10π10\pi cm²/s. How fast is the radius growing when the radius is 5 cm?

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AnswerB · 1 cm/s

  1. A=πr2A = \pi r^2, so dAdt=2πrdrdt\frac{dA}{dt} = 2\pi r\frac{dr}{dt}.

  2. 10π=2π×5×drdt10\pi = 2\pi \times 5 \times \frac{dr}{dt}, so drdt=1\frac{dr}{dt} = 1 cm/s.

Worth noting

2 cm/s divides by πr\pi r instead of 2πr2\pi r.

The radius of a spherical balloon grows at 1 cm/s. How fast is its volume growing when the radius is 3 cm?

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AnswerD · 36π36 \pi cm³/s

  1. V=43πr3V = \frac{4}{3}\pi r^3, so dVdt=4πr2drdt\frac{dV}{dt} = 4\pi r^2\frac{dr}{dt}.

  2. 4π×9×1=36π4\pi \times 9 \times 1 = 36\pi cm³/s.

Worth noting

12π12\pi is 4πr4\pi r: the radius must be squared.

Assertion (A): If the radius of a circle grows at a constant rate, its area grows at a constant rate too.

Reason (R): dAdt=2πrdrdt\frac{dA}{dt} = 2\pi r\frac{dr}{dt}.

Options for question 12

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AnswerD · A is false, but R is true.

  1. R is the chain rule applied to A=πr2A = \pi r^2. True.

  2. A is false: by R, dAdt\frac{dA}{dt} grows with rr, so the area grows faster and faster.

The volume of a cube grows at 9 cm³/s. How fast is each edge growing when the edge is 3 cm long?

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AnswerA · 13\frac{1}{3} cm/s

  1. V=a3V = a^3, so dVdt=3a2dadt\frac{dV}{dt} = 3a^2\frac{da}{dt}.

  2. 9=3×9×dadt9 = 3 \times 9 \times \frac{da}{dt}, so dadt=13\frac{da}{dt} = \frac{1}{3} cm/s.

Worth noting

1 cm/s divides by a2=9a^2 = 9 but forgets the 3 from differentiating a3a^3.

Air is pumped into a spherical balloon at a steady 100 cm³ every second. For a sphere of radius rr, V=43πr3V = \frac{4}{3}\pi r^{3} and the surface area is S=4πr2S = 4\pi r^{2}.

How fast is the balloon's radius growing when the radius is 5 cm?

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AnswerA · 1π\frac{1}{\pi} cm/s

  1. dVdt=4πr2drdt\frac{dV}{dt} = 4\pi r^{2}\frac{dr}{dt}, so 100=4π(25)drdt100 = 4\pi(25)\frac{dr}{dt}.

  2. drdt=100100π=1π\frac{dr}{dt} = \frac{100}{100\pi} = \frac{1}{\pi} cm/s.

Worth noting

5π\frac{5}{\pi} uses rr where the derivative of r3r^{3} needs r2r^{2}.

Air is pumped into a spherical balloon at a steady 100 cm³ every second. For a sphere of radius rr, V=43πr3V = \frac{4}{3}\pi r^{3} and the surface area is S=4πr2S = 4\pi r^{2}.

How fast is the balloon's surface area growing when the radius is 5 cm?

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AnswerB · 40 cm²/s

  1. dSdt=8πrdrdt\frac{dS}{dt} = 8\pi r\frac{dr}{dt}.

  2. At r=5r = 5, drdt=1π\frac{dr}{dt} = \frac{1}{\pi}: 8π(5)(1π)=408\pi(5)\left(\frac{1}{\pi}\right) = 40 cm²/s.

Worth noting

40π40\pi forgets that drdt\frac{dr}{dt} already carries a 1π\frac{1}{\pi}.

Air is pumped into a spherical balloon at a steady 100 cm³ every second. For a sphere of radius rr, V=43πr3V = \frac{4}{3}\pi r^{3} and the surface area is S=4πr2S = 4\pi r^{2}.

How fast is the balloon's radius growing when the radius is 10 cm?

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AnswerA · 14π\frac{1}{4 \pi} cm/s

  1. 100=4π(100)drdt100 = 4\pi(100)\frac{dr}{dt}.

  2. drdt=14π\frac{dr}{dt} = \frac{1}{4\pi} cm/s.

Worth noting

12π\frac{1}{2\pi} halves the rate for twice the radius; the rate goes as 1r2\frac{1}{r^{2}}, so it falls to a quarter.

Air is pumped into a spherical balloon at a steady 100 cm³ every second. For a sphere of radius rr, V=43πr3V = \frac{4}{3}\pi r^{3} and the surface area is S=4πr2S = 4\pi r^{2}.

How does the rate at which the balloon's radius grows change as the balloon gets bigger?

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AnswerD · It falls, in proportion to 1r2\frac{1}{r^{2}}

  1. drdt=1004πr2\frac{dr}{dt} = \frac{100}{4\pi r^{2}}.

  2. The same 100 cm³ spreads over a larger surface each second, so the radius grows more slowly, as 1r2\frac{1}{r^{2}}.

Cost, revenue and profit functions

13 questions

A firm's cost of making xx units is C(x)=500+20xC(x) = 500 + 20x rupees and its revenue is R(x)=45xR(x) = 45x rupees. What is its profit on 40 units?

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AnswerB · ₹500

  1. R(40)=1,800R(40) = 1{,}800 and C(40)=500+800=1,300C(40) = 500 + 800 = 1{,}300.

  2. Profit =1,800−1,300=500= 1{,}800 - 1{,}300 = 500 rupees.

Worth noting

₹1,000 leaves out the fixed cost of ₹500.

A firm's cost is C(x)=3,000+25xC(x) = 3{,}000 + 25x rupees and its revenue is R(x)=40xR(x) = 40x rupees for xx units. At how many units does it break even?

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AnswerD · 200 units

  1. Break-even is where revenue equals cost: 40x=3,000+25x40x = 3{,}000 + 25x.

  2. 15x=3,00015x = 3{,}000, so x=200x = 200 units.

Worth noting

120 divides the fixed cost by 25, the cost per unit; each unit only adds 40−25=1540 - 25 = 15 rupees towards it.

The cost of making xx units is C(x)=2x2+15x+800C(x) = 2x^{2} + 15x + 800 rupees. What is the fixed cost?

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AnswerB · ₹800

  1. The fixed cost is what must be paid even when nothing is made: C(0)C(0).

  2. C(0)=800C(0) = 800 rupees.

Worth noting

₹817 is C(1)C(1), which includes the cost of one unit.

A firm's cost of making xx units is C(x)=1,000+25xC(x) = 1{,}000 + 25x rupees and its revenue is R(x)=60xR(x) = 60x rupees. What is its profit on 50 units?

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AnswerA · ₹750

  1. Profit P(x)=R(x)−C(x)=35x−1,000P(x) = R(x) - C(x) = 35x - 1{,}000.

  2. P(50)=1,750−1,000=750P(50) = 1{,}750 - 1{,}000 = 750 rupees.

Worth noting

₹1,750 forgets the fixed cost of ₹1,000.

A firm's cost is C(x)=4,500+30xC(x) = 4{,}500 + 30x rupees and its revenue is R(x)=75xR(x) = 75x rupees for xx units. What is the break-even output?

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AnswerB · 100 units

  1. Break-even is where R(x)=C(x)R(x) = C(x): 75x=4,500+30x75x = 4{,}500 + 30x.

  2. 45x=4,50045x = 4{,}500, so x=100x = 100 units.

Worth noting

60 divides the fixed cost by the price, 75, not by the margin per unit, 75−30=4575 - 30 = 45.

When xx units are sold, the price of each is p=60−2xp = 60 - 2x rupees. What is the total revenue function?

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AnswerD · −2x2+60x- 2 x^{2} + 60 x

  1. Revenue = price × quantity: R(x)=x(60−2x)R(x) = x(60 - 2x).

  2. R(x)=60x−2x2R(x) = 60x - 2x^{2}.

Worth noting

60−2x60 - 2x is the price of one unit, not the revenue from xx of them.

The cost of making xx units is C(x)=2x2+10x+200C(x) = 2x^{2} + 10x + 200 rupees. What is the average cost per unit when 20 units are made?

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AnswerB · ₹60

  1. C(20)=800+200+200=1,200C(20) = 800 + 200 + 200 = 1{,}200 rupees.

  2. Average cost =C(20)20=1,20020=60= \frac{C(20)}{20} = \frac{1{,}200}{20} = 60 rupees per unit.

Worth noting

₹90 is the marginal cost C′(20)=4x+10C'(20) = 4x + 10, the cost of one more unit, not the average.

Read the two statements and choose the correct option.

I. The fixed cost is the cost when nothing is produced, C(0)C(0).

II. The average cost of a unit is always more than the marginal cost.

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AnswerA · Only I

  1. I: C(0)C(0) is what must be paid even at zero output, such as rent. True.

  2. II: for C(x)=2x2+10x+200C(x) = 2x^{2} + 10x + 200 at x=20x = 20, the average is 60 but the marginal cost is 90. False.

Each unit sells at p=50−xp = 50 - x rupees when xx units are sold, and making them costs C(x)=10x+200C(x) = 10x + 200 rupees. What is the profit on 15 units?

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AnswerA · ₹175

  1. R(15)=15×35=525R(15) = 15 \times 35 = 525 and C(15)=150+200=350C(15) = 150 + 200 = 350.

  2. Profit =525−350=175= 525 - 350 = 175 rupees.

Worth noting

₹525 is the revenue alone.

The revenue from selling xx units is R(x)=60x−2x2R(x) = 60x - 2x^{2} rupees. What is the average revenue per unit?

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AnswerD · 60−2x60 - 2 x

  1. Average revenue =R(x)x= \frac{R(x)}{x}.

  2. 60x−2x2x=60−2x\frac{60x - 2x^{2}}{x} = 60 - 2x, which is the price of a unit.

Worth noting

60−4x60 - 4x is the marginal revenue, R′(x)R'(x).

When xx units are sold, each sells at p=100−4xp = 100 - 4x rupees. What is the total revenue function?

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AnswerD · −4x2+100x- 4 x^{2} + 100 x

  1. Revenue is price times quantity: R(x)=x⋅pR(x) = x \cdot p.

  2. R(x)=x(100−4x)=100x−4x2R(x) = x(100 - 4x) = 100x - 4x^{2}.

Worth noting

100−8x100 - 8x is the marginal revenue, R′(x)R'(x).

The cost of making xx units is C(x)=3x2+12x+300C(x) = 3x^{2} + 12x + 300 rupees. What is the average cost per unit when 10 units are made?

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AnswerC · ₹72

  1. Average cost =C(x)x=3x+12+300x= \frac{C(x)}{x} = 3x + 12 + \frac{300}{x}.

  2. At x=10x = 10: 30+12+30=7230 + 12 + 30 = 72 rupees per unit.

Worth noting

₹720 is the total cost of 10 units; ₹42 leaves out the fixed cost's share.

Which of the following statements are true?

I. Profit equals revenue minus cost.

II. Average cost is total cost divided by the number of units.

III. At the break-even point, revenue equals cost.

IV. The fixed cost changes as the output changes.

Options for question 30

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AnswerB · I, II and III only

  1. I, II and III are the definitions of profit, average cost and break-even.

  2. IV is false: the fixed cost, such as rent, stays the same whatever the output; it is the variable cost that changes.

Marginal cost

16 questions

The total cost of making xx units is C(x)=x3−6x2+20x+300C(x) = x^{3} - 6x^{2} + 20x + 300 rupees. What is the marginal cost when 5 units are made?

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AnswerC · ₹35

  1. Marginal cost is the derivative of total cost: MC=C′(x)=3x2−12x+20MC = C'(x) = 3x^{2} - 12x + 20.

  2. C′(5)=75−60+20=35C'(5) = 75 - 60 + 20 = 35 rupees.

Worth noting

₹375 is the total cost of the 5 units, C(5)C(5).

Assertion (A): If C(x)=500+8xC(x) = 500 + 8x, the marginal cost is the same at every level of output.

Reason (R): The derivative of a linear function is a constant.

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AnswerA · Both A and R are true, and R is the correct explanation of A.

  1. C′(x)=8C'(x) = 8 for every xx: each extra unit costs ₹8. A is true.

  2. R is the reason the marginal cost does not change, so R explains A.

Read the two statements and choose the correct option.

I. For C(x)=300+7xC(x) = 300 + 7x, the marginal cost is ₹7 at every level of output.

II. Raising the fixed cost raises the marginal cost.

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AnswerA · Only I

  1. I: C′(x)=7C'(x) = 7, a constant. True.

  2. II: a constant's derivative is 0, so the fixed cost never enters the marginal cost. False.

The total cost of making xx units is C(x)=x3−3x2+15x+200C(x) = x^{3} - 3 x^{2} + 15 x + 200 rupees. What is the marginal cost when 5 units are made?

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AnswerA · ₹60

  1. Marginal cost MC=C′(x)=3x2−6x+15MC = C'(x) = 3 x^{2} - 6 x + 15.

  2. At x=5x = 5: 6060 rupees per unit.

Worth noting

₹275 is C(5)C(5), the total cost.

The total cost of making xx units is C(x)=x210+6x+200C(x) = \frac{x^{2}}{10} + 6 x + 200 rupees. What is the marginal cost when 50 units are made?

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AnswerC · ₹16

  1. Marginal cost MC=C′(x)=x5+6MC = C'(x) = \frac{x}{5} + 6.

  2. At x=50x = 50: 1616 rupees per unit.

Worth noting

₹11 differentiates 0.1x20.1x^{2} as 0.1x0.1x, forgetting the factor 2.

A factory's cost of making xx radios a day is C(x)=500+40x−0.6x2+0.01x3C(x) = 500 + 40x - 0.6x^{2} + 0.01x^{3} rupees.

What is the factory's marginal cost at 10 radios a day?

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AnswerC · ₹31

  1. MC=40−1.2x+0.03x2MC = 40 - 1.2x + 0.03x^{2}.

  2. At x=10x = 10: 40−12+3=3140 - 12 + 3 = 31 rupees.

Worth noting

₹37 differentiates −0.6x2-0.6x^{2} as −0.6x-0.6x, dropping the factor 2.

A factory's cost of making xx radios a day is C(x)=500+40x−0.6x2+0.01x3C(x) = 500 + 40x - 0.6x^{2} + 0.01x^{3} rupees.

What is the factory's average cost of a radio at 10 radios a day?

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AnswerD · ₹85

  1. C(10)=500+400−60+10=850C(10) = 500 + 400 - 60 + 10 = 850.

  2. Average cost =85010=85= \frac{850}{10} = 85 rupees.

Worth noting

₹35 leaves out the fixed ₹500, which each radio still has to share.

When xx units are being made, the marginal cost C′(x)C'(x) is approximately the cost of what?

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AnswerD · One more unit, the (x+1)(x + 1)th

  1. C′(x)≈C(x+1)−C(x)1C'(x) \approx \frac{C(x + 1) - C(x)}{1}, the extra cost when output rises by one unit.

  2. So it is roughly the cost of the (x+1)(x + 1)th unit.

Worth noting

The average cost is C(x)x\frac{C(x)}{x}, a different quantity.

The cost of making xx units is C(x)=100+12x+x2C(x) = 100 + 12x + x^{2} rupees. Using the marginal cost at x=10x = 10, estimate the cost of making the 11th unit.

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AnswerC · ₹32

  1. C′(x)=12+2xC'(x) = 12 + 2x, so C′(10)=32C'(10) = 32.

  2. The 11th unit costs about ₹32. (Exactly, C(11)−C(10)=353−320=33C(11) - C(10) = 353 - 320 = 33; the marginal cost is the quick estimate.)

Worth noting

₹320 is the cost of all 10 units, C(10)C(10).

The cost of making xx units is C(x)=100+40xC(x) = 100 + 40\sqrt{x} rupees. What is the marginal cost when 25 units are made?

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AnswerC · ₹4

  1. C′(x)=40×12x=20xC'(x) = 40 \times \frac{1}{2\sqrt{x}} = \frac{20}{\sqrt{x}}.

  2. At x=25x = 25: 205=4\frac{20}{5} = 4 rupees.

Worth noting

₹8 forgets the 12\frac{1}{2} from differentiating x\sqrt{x}.

The cost of making xx units is C(x)=500+10x+0.5x2C(x) = 500 + 10x + 0.5x^{2} rupees. Using the marginal cost at x=20x = 20, about how much does the 21st unit cost to make?

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AnswerB · ₹30

  1. C′(x)=10+xC'(x) = 10 + x, so C′(20)=30C'(20) = 30.

  2. The marginal cost at 20 estimates the cost of the next unit: about ₹30. (Exactly, C(21)−C(20)=30.5C(21) - C(20) = 30.5.)

Worth noting

₹920.50 is the total cost of 21 units.

A factory's cost of making xx radios a day is C(x)=500+40x−0.6x2+0.01x3C(x) = 500 + 40x - 0.6x^{2} + 0.01x^{3} rupees.

At what daily output is the factory's marginal cost lowest?

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AnswerB · 20 units

  1. ddx(MC)=−1.2+0.06x=0\frac{d}{dx}(MC) = -1.2 + 0.06x = 0 at x=20x = 20.

  2. The next derivative, 0.06, is positive, so this is a minimum.

Worth noting

40 radios differentiates 0.03x20.03x^{2} as 0.03x0.03x.

A factory's cost of making xx radios a day is C(x)=500+40x−0.6x2+0.01x3C(x) = 500 + 40x - 0.6x^{2} + 0.01x^{3} rupees.

What is the lowest marginal cost the factory reaches?

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AnswerA · ₹28

  1. At x=20x = 20: MC=40−24+0.03(400)MC = 40 - 24 + 0.03(400).

  2. 40−24+12=2840 - 24 + 12 = 28 rupees.

Worth noting

₹22 takes 0.03(400)0.03(400) as 6.

The cost of making xx units is C(x)=x3−9x2+40x+100C(x) = x^{3} - 9x^{2} + 40x + 100 rupees. At what output is the marginal cost least?

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AnswerA · 3 units

  1. MC=3x2−18x+40MC = 3x^{2} - 18x + 40. It is least where its own derivative is 0: 6x−18=06x - 18 = 0.

  2. x=3x = 3 units, and the second derivative 6 is positive, so it is a minimum.

Worth noting

9 units halves 18 but forgets that the square term is 3x23x^{2}: the lowest point of 3x2−18x+403x^{2} - 18x + 40 is at 182×3=3\frac{18}{2 \times 3} = 3.

The average cost of making xx units is 2x+5+100x2x + 5 + \frac{100}{x} rupees. What is the marginal cost when 10 units are made?

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AnswerD · ₹45

  1. Total cost =x×= x \times average cost =2x2+5x+100= 2x^{2} + 5x + 100.

  2. MC=4x+5MC = 4x + 5, so at x=10x = 10 it is 45 rupees.

Worth noting

₹35 is the average cost at 10 units, and ₹2 differentiates the average cost instead of the total.

The cost of making xx units is C(x)=x3−12x2+60x+50C(x) = x^{3} - 12x^{2} + 60x + 50 rupees. At what output is the marginal cost least?

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AnswerA · 4 units

  1. MC=3x2−24x+60MC = 3x^{2} - 24x + 60, and ddxMC=6x−24\frac{d}{dx}MC = 6x - 24.

  2. This is 0 at x=4x = 4, and the second derivative 6 is positive: the least marginal cost is at 4 units (where MC=12MC = 12).

Worth noting

12 is the least value of the marginal cost, not the output where it occurs.

Marginal revenue

16 questions

The revenue from selling xx units is R(x)=50x−0.5x2R(x) = 50x - 0.5x^{2} rupees. What is the marginal revenue when 20 units are sold?

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AnswerB · ₹30

  1. Marginal revenue is the derivative of revenue: MR=R′(x)=50−xMR = R'(x) = 50 - x.

  2. R′(20)=30R'(20) = 30 rupees.

Worth noting

₹800 is the revenue from all 20 units, R(20)R(20).

A trader sells every unit at a fixed price of ₹45. What is the marginal revenue?

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AnswerD · ₹45

  1. R(x)=45xR(x) = 45x.

  2. MR=R′(x)=45MR = R'(x) = 45: each extra unit adds its price.

Worth noting

₹0 would mean selling more adds nothing; at a fixed price each unit adds ₹45.

The revenue from selling xx units is R(x)=80x−2x2R(x) = 80x - 2x^{2} rupees. What is the marginal revenue when 10 units are sold?

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AnswerB · ₹40

  1. MR=R′(x)=80−4xMR = R'(x) = 80 - 4x.

  2. At x=10x = 10: 80−40=4080 - 40 = 40 rupees.

Worth noting

₹60 is the average revenue, the price, 80−2x80 - 2x.

The total revenue from selling xx units is R(x)=13x2+26x+15R(x) = 13x^{2} + 26x + 15 rupees. What is the marginal revenue when x=7x = 7?

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AnswerC · ₹208

  1. MR=R′(x)=26x+26MR = R'(x) = 26x + 26.

  2. At x=7x = 7: 182+26=208182 + 26 = 208 rupees.

Worth noting

₹182 leaves out the 26 from differentiating 26x26x.

A firm finds that to sell xx units a week it must set the price at p=120−2xp = 120 - 2x rupees a unit.

What is the firm's marginal revenue when it sells 20 units a week?

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AnswerA · ₹40

  1. R(x)=px=120x−2x2R(x) = px = 120x - 2x^{2}, so MR=120−4xMR = 120 - 4x.

  2. At x=20x = 20: 120−80=40120 - 80 = 40 rupees.

Worth noting

₹80 is the price at 20 units; to sell one more the firm lowers the price on every unit.

A firm finds that to sell xx units a week it must set the price at p=120−2xp = 120 - 2x rupees a unit.

At what price does the firm get the most revenue?

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AnswerB · ₹60

  1. Revenue is greatest at 30 units.

  2. p=120−2(30)=60p = 120 - 2(30) = 60 rupees.

Worth noting

30 is the number of units, not the price.

The price at which xx units can be sold is p=80−4xp = 80 - 4x rupees each. What is the marginal revenue when 5 units are sold?

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AnswerB · ₹40

  1. R(x)=x(80−4x)=80x−4x2R(x) = x(80 - 4x) = 80x - 4x^{2}, so MR=80−8xMR = 80 - 8x.

  2. At x=5x = 5: 80−40=4080 - 40 = 40 rupees.

Worth noting

₹60 is the price at x=5x = 5; selling one more unit also lowers the price of the other five.

For R(x)=120x−3x2R(x) = 120x - 3x^{2} rupees, at what level of sales is the marginal revenue zero?

Options for question 54

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AnswerC · 20 units

  1. MR=120−6xMR = 120 - 6x.

  2. 120−6x=0120 - 6x = 0 gives x=20x = 20 units; there total revenue is at its largest.

Worth noting

40 units is where total revenue itself is zero, 3x(40−x)=03x(40 - x) = 0.

Read the two statements and choose the correct option.

I. If every unit sells at the same fixed price pp, the marginal revenue is pp.

II. If the price is p=a−bxp = a - bx, the marginal revenue a−2bxa - 2bx falls twice as fast as the price.

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AnswerC · Both I and II

  1. I: R=pxR = px, so R′(x)=pR'(x) = p. True.

  2. II: R=ax−bx2R = ax - bx^{2}, so MR=a−2bxMR = a - 2bx, which falls by 2b2b per unit while the price falls by bb. True.

Assertion (A): When the marginal revenue is negative, selling one more unit lowers total revenue.

Reason (R): Marginal revenue is the rate of change of total revenue with respect to the number sold.

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AnswerA · Both A and R are true, and R is the correct explanation of A.

  1. R is the definition of marginal revenue. True.

  2. A negative rate means revenue falls as sales rise, so A is true because of R.

Each unit sells at p=120−3xp = 120 - 3x rupees when xx units are sold. What is the marginal revenue when 15 units are sold?

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AnswerC · ₹30

  1. R(x)=120x−3x2R(x) = 120x - 3x^{2}, so MR=120−6xMR = 120 - 6x.

  2. At x=15x = 15: 120−90=30120 - 90 = 30 rupees.

Worth noting

₹75 is the price at 15 units; ₹−3 differentiates the price instead of the revenue.

For R(x)=150x−5x2R(x) = 150x - 5x^{2} rupees, at what level of sales is the marginal revenue zero?

Options for question 58

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AnswerB · 15 units

  1. MR=150−10xMR = 150 - 10x.

  2. 150−10x=0150 - 10x = 0 at x=15x = 15 units, where revenue is greatest.

Worth noting

30 units is where the revenue itself falls to zero.

Each unit sells at p=40−xp = 40 - x rupees when xx units are sold. At x=10x = 10, how do the price and the marginal revenue compare?

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AnswerD · The price, ₹30, is more than the marginal revenue, ₹20

  1. Price at 10 units: 40−10=3040 - 10 = 30. R(x)=40x−x2R(x) = 40x - x^{2}, so MR=40−2x=20MR = 40 - 2x = 20.

  2. To sell one more unit the price falls for every unit, so the extra revenue is less than the price.

A firm finds that to sell xx units a week it must set the price at p=120−2xp = 120 - 2x rupees a unit.

How many units a week bring the firm the most revenue?

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AnswerC · 30 units

  1. Revenue is greatest where MR=120−4x=0MR = 120 - 4x = 0.

  2. x=30x = 30, and R′′(x)=−4<0R''(x) = -4 < 0.

Worth noting

60 units is where the price falls to zero, and the revenue with it.

A firm finds that to sell xx units a week it must set the price at p=120−2xp = 120 - 2x rupees a unit.

What is the firm's greatest weekly revenue?

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AnswerC · ₹1,800

  1. At x=30x = 30: R=120(30)−2(900)R = 120(30) - 2(900).

  2. 3,600−1,800=1,8003{,}600 - 1{,}800 = 1{,}800 rupees.

Worth noting

₹3,600 drops the price cut, charging ₹120 on every unit.

The demand for a product is x=100−2px = 100 - 2p, where pp is the price in rupees. What is the marginal revenue when 20 units are sold?

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AnswerA · ₹30

  1. Solve for the price: p=50−x2p = 50 - \frac{x}{2}, so R(x)=50x−x22R(x) = 50x - \frac{x^{2}}{2}.

  2. MR=50−xMR = 50 - x; at x=20x = 20, 30 rupees.

Worth noting

₹40 is the price at 20 units, 50−1050 - 10.

Maximising profit and revenue

17 questions

A home bakery's cost of making xx cakes a day is C(x)=200+10x+0.5x2C(x) = 200 + 10x + 0.5x^{2} rupees. Every cake sells for ₹50, however many she makes.

What is the bakery's marginal cost when it makes 30 cakes a day?

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AnswerC · ₹40

  1. MC=C′(x)=10+xMC = C'(x) = 10 + x.

  2. At x=30x = 30: 10+30=4010 + 30 = 40 rupees.

Worth noting

₹25 differentiates 0.5x20.5x^{2} as 0.5x0.5x; the power comes down as a factor of 2.

A home bakery's cost of making xx cakes a day is C(x)=200+10x+0.5x2C(x) = 200 + 10x + 0.5x^{2} rupees. Every cake sells for ₹50, however many she makes.

What profit does the bakery make on a day it makes and sells 30 cakes?

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AnswerB · ₹550

  1. Revenue =50×30=1,500= 50 \times 30 = 1{,}500; cost =200+300+450=950= 200 + 300 + 450 = 950.

  2. Profit =1,500−950=550= 1{,}500 - 950 = 550 rupees.

Worth noting

₹750 leaves out the fixed ₹200 a day.

A firm's revenue is R(x)=100x−x2R(x) = 100x - x^{2} rupees and its cost is C(x)=20x+300C(x) = 20x + 300 rupees for xx units. What output gives the greatest profit?

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AnswerB · 40 units

  1. Profit P(x)=80x−x2−300P(x) = 80x - x^{2} - 300, so P′(x)=80−2xP'(x) = 80 - 2x.

  2. P′(x)=0P'(x) = 0 at x=40x = 40, and P′′(x)=−2<0P''(x) = -2 < 0: a maximum.

Worth noting

50 units maximises revenue alone and ignores the cost of each unit.

For xx units, revenue is R(x)=60x−x2R(x) = 60x - x^{2} rupees and cost is C(x)=12x+100C(x) = 12x + 100 rupees. What is the greatest profit the firm can make?

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AnswerA · ₹476

  1. P(x)=48x−x2−100P(x) = 48x - x^{2} - 100; P′(x)=48−2x=0P'(x) = 48 - 2x = 0 at x=24x = 24.

  2. P(24)=1,152−576−100=476P(24) = 1{,}152 - 576 - 100 = 476 rupees.

Worth noting

₹576 forgets the fixed cost of ₹100.

The price at which xx units sell is p=90−3xp = 90 - 3x rupees. At what price is the total revenue greatest?

Options for question 67

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AnswerD · ₹45

  1. R=90x−3x2R = 90x - 3x^{2}, and R′=90−6x=0R' = 90 - 6x = 0 at x=15x = 15 units.

  2. The price then is 90−3×15=4590 - 3 \times 15 = 45 rupees.

Worth noting

15 is the number of units, not the price.

Read the two statements and choose the correct option.

I. At the output of greatest profit, marginal revenue equals marginal cost.

II. At the output of greatest revenue, marginal revenue is zero.

Options for question 68

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AnswerC · Both I and II

  1. I: profit P=R−CP = R - C is greatest where P′=R′−C′=0P' = R' - C' = 0, that is MR=MCMR = MC. True.

  2. II: revenue is greatest where R′=0R' = 0, that is MR=0MR = 0. True.

A firm's revenue is R(x)=120x−x2R(x) = 120x - x^{2} rupees and its cost is C(x)=40x+600C(x) = 40x + 600 rupees for xx units. How many units give the greatest profit?

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AnswerB · 40 units

  1. Profit P(x)=−x2+80x−600P(x) = - x^{2} + 80 x - 600, and P′(x)=80−2x=0P'(x) = 80 - 2 x = 0 at x=40x = 40; P′′<0P'' < 0, a maximum.

  2. The best output is 40 units.

Worth noting

60 units maximises revenue alone; cost pulls the best output down.

For xx units, revenue is R(x)=90x−2x2R(x) = 90x - 2x^{2} rupees and cost is C(x)=10x+300C(x) = 10x + 300 rupees. What is the greatest profit?

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AnswerC · ₹500

  1. Profit P(x)=−2x2+80x−300P(x) = - 2 x^{2} + 80 x - 300, and P′(x)=80−4x=0P'(x) = 80 - 4 x = 0 at x=20x = 20; P′′<0P'' < 0, a maximum.

  2. The greatest profit is P(20)=500P(20) = 500 rupees.

Worth noting

₹800 forgets the fixed cost of ₹300.

Each unit sells at p=60−2xp = 60 - 2x rupees when xx units are sold. At what price is the total revenue greatest?

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AnswerB · ₹30

  1. R(x)=60x−2x2R(x) = 60x - 2x^{2}, and R′(x)=60−4x=0R'(x) = 60 - 4x = 0 at x=15x = 15.

  2. The price there is 60−30=3060 - 30 = 30 rupees.

Worth noting

15 is the number of units, not the price; ₹450 is the greatest revenue.

For xx units, revenue is R(x)=100x−2x2R(x) = 100x - 2x^{2} and cost is C(x)=x2+10x+50C(x) = x^{2} + 10x + 50 rupees. At what output does marginal revenue equal marginal cost?

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AnswerA · 15 units

  1. MR=100−4xMR = 100 - 4x and MC=2x+10MC = 2x + 10.

  2. 100−4x=2x+10100 - 4x = 2x + 10 gives x=15x = 15: the output of greatest profit.

Worth noting

25 units sets MR=0MR = 0, which maximises revenue, not profit.

Read the two statements and choose the correct option.

I. Total revenue is greatest where marginal revenue is zero.

II. Profit is greatest where marginal revenue is zero.

Options for question 73

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AnswerA · Only I

  1. I: revenue stops rising where its derivative, MR, is 0. True.

  2. II: profit is greatest where P′=MR−MC=0P' = MR - MC = 0, that is MR=MCMR = MC; MR = 0 only when MC is 0. False.

A home bakery's cost of making xx cakes a day is C(x)=200+10x+0.5x2C(x) = 200 + 10x + 0.5x^{2} rupees. Every cake sells for ₹50, however many she makes.

How many cakes a day give the bakery the greatest profit?

Options for question 74

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AnswerC · 40 units

  1. P(x)=50x−200−10x−0.5x2=40x−200−0.5x2P(x) = 50x - 200 - 10x - 0.5x^{2} = 40x - 200 - 0.5x^{2}.

  2. P′(x)=40−x=0P'(x) = 40 - x = 0 at x=40x = 40, and P′′(x)=−1<0P''(x) = -1 < 0: a maximum. This is where marginal cost reaches the ₹50 price.

Worth noting

20 cakes is where the average cost is least, not where profit is greatest.

A home bakery's cost of making xx cakes a day is C(x)=200+10x+0.5x2C(x) = 200 + 10x + 0.5x^{2} rupees. Every cake sells for ₹50, however many she makes.

What is the bakery's greatest daily profit?

Options for question 75

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AnswerB · ₹600

  1. At 40 cakes: revenue =2,000= 2{,}000; cost =200+400+800=1,400= 200 + 400 + 800 = 1{,}400.

  2. Profit =2,000−1,400=600= 2{,}000 - 1{,}400 = 600 rupees.

Worth noting

₹800 leaves out the fixed ₹200.

The cost of making xx units is C(x)=x2+2x+400C(x) = x^{2} + 2x + 400 rupees. At what output is the average cost per unit least?

Options for question 76

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AnswerD · 20 units

  1. Average cost AC=x+2+400xAC = x + 2 + \frac{400}{x}, so AC′=1−400x2AC' = 1 - \frac{400}{x^{2}}.

  2. AC′=0AC' = 0 at x=20x = 20, and AC′′=800x3>0AC'' = \frac{800}{x^{3}} > 0: the least average cost, ₹42 a unit.

Worth noting

1 unit minimises the marginal cost 2x+22x + 2 over whole numbers, which is not the average.

Assertion (A): For C(x)=x2+2x+400C(x) = x^{2} + 2x + 400, the average cost and the marginal cost are equal at x=20x = 20.

Reason (R): Average cost is least at the output where it equals marginal cost.

Options for question 77

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AnswerA · Both A and R are true, and R is the correct explanation of A.

  1. AC(20)=20+2+20=42AC(20) = 20 + 2 + 20 = 42 and MC(20)=2×20+2=42MC(20) = 2 \times 20 + 2 = 42. A is true.

  2. R is true: ddx(Cx)=xC′−Cx2=0\frac{d}{dx}\left(\frac{C}{x}\right) = \frac{xC' - C}{x^{2}} = 0 exactly when C′=CxC' = \frac{C}{x}. And x=20x = 20 is that least point, so R explains A.

Each unit sells at p=200−4xp = 200 - 4x rupees when xx units are sold, and the cost is C(x)=40x+500C(x) = 40x + 500 rupees. At what price is the profit greatest?

Options for question 78

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AnswerD · ₹120

  1. P(x)=160x−4x2−500P(x) = 160x - 4x^{2} - 500, and P′(x)=160−8x=0P'(x) = 160 - 8x = 0 at x=20x = 20.

  2. The price there is 200−80=120200 - 80 = 120 rupees.

Worth noting

₹100 is the price that maximises revenue alone, at 25 units.

The cost of making xx units is C(x)=2x2+8x+200C(x) = 2x^{2} + 8x + 200 rupees. What is the least possible average cost per unit?

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AnswerD · ₹48

  1. Average cost =2x+8+200x= 2x + 8 + \frac{200}{x}; its derivative 2−200x2=02 - \frac{200}{x^{2}} = 0 at x=10x = 10.

  2. At x=10x = 10: 20+8+20=4820 + 8 + 20 = 48 rupees per unit.

Worth noting

10 is the output where the least average cost occurs, not the cost.

NTA's Mathematics / Applied Mathematics syllabus has three sections: Section A1, which every candidate answers, then Section B1 (Mathematics) or Section B2 (Applied Mathematics), of which a candidate answers one. Each section lists units and topics but no chapters, so the chapters here are ours. Where both B sections list a topic that Section A also lists, its questions sit once, in Section A.