Reddy Wendover Limited is obliged under the terms of a contractual arrangement to insure shipments of valuable goods to an overseas customer.The customer orders varying amounts of goods - for example, recent orders have been for 153, 226, 504, and 81 items. The costs of insurance are £300 for 100 items, £600 for any shipment of between 101 and 200 items, £900 for any shipment of 201 to 300 items, and so on.
Which one of the following graphs best represents this cost?

Question

Quizplus · Accepted Answer

The graph in option B shows a step function, with increasing costs for increasing numbers of items shipped in steps of 100. This matches the information given in the question where the cost increases at set intervals of 100 items.

Reddy Wendover Limited Is Obliged Under the Terms of a Contractual