Answer:
<h2>The contestant should not play.</h2>Step-by-step explanation:
As per the given question, their current winning is $1 million.
The probability of the guessing to be true is 50% = .
There is also a possibility of 50% to be wrong, which can reduced the winning amount to $500,000 that is the half of the current amount.
Hence, the contestant should not play.
Given:
Fixed cost = b = $ 42,500
Production cost (Variable cost) /unit = m = $ 6/ unit
Let 'x' represent the number of unit, therefore the variable cost will be
a) The cost function will be the sum of the fixed cost and the variable cost.
b) The revenue function is the amount the product is sold per unit.
Recall: 'x' represents the number of units.
Therefore,
Hence, the revenue function R(x) is
c) The profit function is the difference between the revenue function and the cost function.
Hence, the profit function is
d) Let us compute the profit (loss) values when the units are 6000 and 11000
Using the profit function
Therefore,
Hence,