The Terrific Gadget Company. The Terrific Gadget Company reports that when they

Question

The Terrific Gadget Company. The Terrific Gadget Company reports that when they produce and sell n Wazoos in a week, the cost is represented by the model C = 170 +1.5n and the revenue is represented by the model R = 6.7n, where both C and R are in dollars. i. Write an equation for the profit from producing and selling n Wazoos. Hint: Profit, P = revenue – cost. ii. Identify the vertical intercept for your profit equation. iii. What does the vertical intercept tell you about the problem situation? Choose the correct row that gives the correct answer to all parts (i, ii, iii) and enter the letter in the box below. Equation Vertical intercept Meaning of vertical intercept a P = 170 – 5.2n (0, 170) When zero wazoos are produced and sold, the profit is 170 dollars b P = 5.2n +170 (170, 0) When zero wazoos are produced and sold, the profit is 170 dollars c P = 5.2n – 170 (0, -170) When zero wazoos are produced and sold, the profit is -170 dollars d P = -5.2n – 170 (-170, 0) When zero wazoos are produced and sold, the profit is -170 dollars

Explanation / Answer

(1) Profit = Revenue - cost

Profit = 6.7n - 1.5n - 170 = 5.2n - 170

(2) Vertical intercept

Vertical intercept of profit equation is the profit in case of 0 item is produced

P(n) = 5.2n - 170

P(0) = 5.2*0 - 170 = -170

(3)

Vertical intercept of -170 means if no item is produced, there will be a loss of $170.

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