Given:
Investment on equipment = $98,000
Cost of each unit = $12.20
Selling price of each unit = $16.98.
To find:
(a) The total cost C as a function of x.
(b) The revenue R as a function of x.
(c) The profit P as a function of x.
Solution:
Let x be the number of units produced and sold.
We have,
Fixed cost = $98,000
Variable cost = $12.20x
Total cost = Fixed cost + Variable cost
Therefore, the cost function is .
Selling price of each unit = Revenue from each unit = $16.98.
Total revenue = Revenue from x units
Therefore, the revenue function is .
Profit = Revenue - Cost
Therefore, the profit function is .