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1 answer:
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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,