The firm \"Talbots & Co.\" faces the following cost function c(x) = 11.5x2 + 70
ID: 1104697 • Letter: T
Question
The firm "Talbots & Co." faces the following cost function c(x) = 11.5x2 + 70 where c is the total production cost and x is the quantity produced. The quantity they can sell depends on the price they charge: the lower the price, the more they will sell. Equivalently, the price they can charge depends on the quantity they want to sell, giving rise to the following relation between price and quantity p(x) = 1,000 - x where p is the price that "Talbots and co." charges for its product. Answer the following questions about this firm. (a) What is the revenue function for the firm "Talbots and co."? Select one: a. r(x) = 1,000x - x^2 b. r(x) = 11.5x^3 + 70 x c. r(x) = 23x d. r(x) = 1,000 - x - (11.5x^2 + 70) e. r(x) = 1,000x - x^2 - (11.5x^2 + 70) f. r(x) = 1,000 - 2x - 23x
Explanation / Answer
Answer :As we know that revenue is equal to price and quantity sold in the market. Revenue is total sales in the market.
Revenue = Price *Quantity
P(x) =1000-x
q = x
R(x) = P*q
R(x) = (1000-x)x
R(x) = 1000x -x2
Option A is correct.
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