Total expenses of a boarding house are partly fixed and partly varying linearly with the number of boarders. The average expense per boarder is Rs. 700 when there are 25 boarders and Rs. 600 when there are 50 boarders. What is the average expense per boarder when there are 100 boarders?
Explanation:
Let x be the fixed cost and y the variable cost 17500 = x + 25y … (i) 30000 = x + 50y … (ii)
Solving the equation (i) and (ii), we get x = 5000, y = 500
Now if the average expense of 100 boarders be ‘A’.
Then 100 × A = 5000 + 500 × 100 ∴ A = 550.
Hence, option (a).
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