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Answer:
The cost function is .
The revenue function is .
The profit function is .
Step-by-step explanation:
We have the following definitions:
The cost function is a mathematical formula that gives the total cost to produce a certain number of units. It consists of variable costs and fixed costs and is given by
If units are sold and the price per unit is
, then the total revenue is
and is called the revenue function.
If units are sold, then the total profit is
and is called the profit function.
Applying the above definitions we get that:
We know that the company has fixed monthly costs of $130,000 and production costs on its product of $32 per unit.
Therefore,
The cost function is .
We know that the company sells its product for $66 per unit.
Therefore,
The revenue function is .
The profit function is