1). A company has fixed costs for $ 400 and marginal cost of $ 40 per item, if i
ID: 3113451 • Letter: 1
Question
1). A company has fixed costs for $ 400 and marginal cost of $ 40 per item, if items are sold at $ 60 each, determine the cost function, revenue function and profit function. 2). If you sell 100 shirts per week when the price is $ 10, and 200 per week when you lower the price to $ 8, then the demand function is___________________________. 3). A company has started its annual activities of selling a certain product. It is observed that sales as the years pass, are given by the relationship: V(x)= -3x + 10 where it represents the number of years elapsed since the beginning of sales and the amount of the sale in thousands of dollars. How much does the company sell the first year of sales? How much does the company sell the third year of sales? How many years must elapse before the annual sale is $ 4000? In what range should the number of years elapsed for the sale to be positive.
Explanation / Answer
1). Let x be the number of items,then,
Cost function, C(x) = variable cost + fixed cost
C(x) = mx + b, where m is the marginal cost and b is the fixed cost
So, C(x) = 40x + 400
Revenue function, R(x) = selling cost
R(x) = 60x
Profit function, P(x) = Revenue - Cost
P(x) = 60x - 40x - 400 = 20x - 400
2)
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