Question

Xyz company's cost function for four months is c=500000+5q

Answer 1

Answer:

The answer is below

Step-by-step explanation:

The company cost (C) = 500000 + 5q.

The cost function is given as C = a + cx, where a is the fixed cost and b is the variable cost. Hence, from the company's cost function, the variable  cost is 5 and the fixed cost is 500000. The selling price is given as 6. The break even volume is given by:

Break even volume = fixed cost / (selling price - variable cost) = 500000 / (6 - 5) = 500000 units