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September 23rd, 2009, 06:13 PM   #1
 
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Cost, revenue, and profit functions.

Please help- I am stumped.

"A Company has a fixed cost of $20,000 and a production cost of $8 for each unit it manufactures. A unit sells for $10."

a) What is the cost function?

b) What is the revenue function?

c) What is the profit function?

d) Compute the profit (loss) corresponding to production levels of 7,000, 9,000 and 12,000 units, respectively.

Thanks so much
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September 24th, 2009, 05:48 AM   #2
 
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Quote:
Originally Posted by kittykat616
Please help- I am stumped.
To learn how to translate word problems into math, try here.

Quote:
Originally Posted by kittykat616
"A Company has a fixed cost of $20,000 and a production cost of $8 for each unit it manufactures. A unit sells for $10."

a) What is the cost function?
If they make 1 unit, what is the variable cost?

If they make 2 units, what is the variable cost?

If they make 3 units, what is the variable cost?

If they make x units, what is the variable cost?

Since the total cost is the fixed cost plug the variable cost, what function represents the cost C(x) for x units?

Quote:
Originally Posted by kittykat616
b) What is the revenue function?
If they sell 1 unit, what is the revenue?

If they sell 2 units, what is the revenue?

If they sell 3 units, what is the revenue?

If they sell x units, what is the revenue?

What then is the function for the revenue R(x) from x units?

Quote:
Originally Posted by kittykat616
c) What is the profit function?
Since profit is the difference between revenue and cost, what function represents the profit P(x) for x units?

Quote:
Originally Posted by kittykat616
d) Compute the profit (loss) corresponding to production levels of 7,000, 9,000 and 12,000 units, respectively.
Plug the given x-values into your formula for P(x). Simplify to find the required values.
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