A finance manager has to select one of the four different suppliers of raw materials.The total cost functions under the four options are given below.Assume the quality of the raw material to be the same,which of the following is preferred by the finance manager?
A) y = 200 + 5X
B) y = 200 + 5.50X
C) y = 200 + 4.50X
D) y = 200 + 4.70X

Question

Quizplus · Accepted Answer

The lowest cost function is preferred, which in this case is y = 200 + 4.50X. This option has the lowest additional cost per unit of X compared to the other options, which means that the finance manager can save more money by choosing this supplier.

A Finance Manager Has to Select One of the Four