Question

The unit cost, in dollars, to produce tubs of ice cream is $18 and the fixed cost is $11610. The price-demand function, in dollars per tub, is p(x)=374-2x.
Find the cost C(x).
Find the revenue function R(x).
Find the profit function P(x).
At what quantity is the smallest break-even point?

Answer 1

Answer:

Step-by-step explanation:

Let x represent the number of tubs of ice cream that was produced.

The unit cost, in dollars, to produce tubs of ice cream is $18 and the fixed cost is $11610. This means that the total cost of producing x tubs of ice cream would be

C(x) = 18x + 11610

The price-demand function, in dollars per tub, is p(x)=374-2x.

The revenue function is product of the output by the price function

R(x) = x × p(x) = xp(x)

R(x) = x(374 - 2x) = 374x - 2x²

The profit function P(x) = R(x) - C(x)

Therefore,

P(x) = 374x - 2x² - (18x + 11610)

P(x) = 374x - 2x² - 18x - 11610

P(x) = - 2x² + 374x - 18x - 11610

P(x) = - 2x² + 356x - 11610

At the break even point,

Revenue = total cost.

Therefore,

374x - 2x² = 18x + 11610

2x² + 18x - 374x + 11610 = 0

2x² - 356x + 11610 = 0

Dividing through by 2, it becomes

x² - 178x + 5805 = 0

Applying the general formula for quadratic equations,

x = [- b ±√(b² - 4ac)]/2a

x = [- - 178 ±√(-178² - 4 × 1 × 5805)]/2 × 1

x = [178 ±√(31684 - 23220)]/2

x = [178 ±92]/2

x = (178 + 92)/2 or (178 - 92)/2

x = 135 or x = 43

Therefore, the quantity for the smallest break-even point is 43.