Harvey is analyzing the production cost of a new product launched by his company. The initial production cost was $1,050. The production cost is at its lowest amount, $250, for 200 items, and thereafter increases as the number of items increases. Which of the following graphs represents the production cost of the product?

Question

W.
X.

Y.
Z.

Answer 1

To determine which graph best represents the production cost of the product described by Harvey, we need to analyze the given information:

1. The initial production cost is $1,050. This likely represents a fixed cost for producing the product.
2. The production cost reaches a minimum of $250 when 200 items are produced. This indicates that there is an efficient range of production that minimizes costs.
3. After 200 items, the cost begins to increase as more items are produced.

Given these points, we're looking for the following characteristics in the graph:

• A relatively high initial cost ($1,050) that decreases to a minimum ($250) at 200 items.
• Cost Curve: After reaching the lowest point at 200 items, the cost should increase steeply as the number of items produced goes beyond 200.

Based on this information, I suggest looking for a graph that:

• Starts at $1,050 on the Y-axis when X (number of items) is essentially 0.
• Shows a downward slope until it reaches the lowest point at 200 items, where it levels off at $250.
• After 200 items, the curve should slope upward, indicating increasing costs with production.

Without seeing the graphs W, X, Y, and Z, I can't definitively point out which one is correct, but you should focus on the graph that displays these characteristics of a decreasing cost up to 200 items followed by an increasing cost thereafter.