Question

A company's revenue function and cost function are as follows: R(x) = 0.55x and C(x) = 10 + 0.05x. What is the minimum number of units, x, that must be sold for the company to make money

Answer 1

Answer:

Minimum number of units sold to make profit is equal to 20

Step-by-step explanation:

Revenue earned by the company as a function of number of units sold as x:

R(x) = 0.55x

Cost for selling units as a function of number of units sold as x:

C(x) = 10 + 0.05x

Net profit earned by the company = (Revenue earned by the company) - (Cost of selling units)

P(x) = (0.55x) - (10 + 0.05x)

P(x) = 0.55x - 10 - 0.05x

P(x) = 0.5x - 10

To earn profit the following condition should satisfy: P(x) ≥ 0

0.5x - 10 ≥ 0

0.5x ≥ 10

x ≥ $\frac{10}{0.5}$

x ≥ 20