A person is the manager of a firm. He is considering manufacturing a new product

Question

A person is the manager of a firm. He is considering manufacturing a new product, so he asks the accounting department for cost estimates and the sales department for sales estimates. After he receives the data, he must decide whether to go ahead with production of the new product. Analyze the following data (find a break-even quantity) and then decide what the manager would do in this case. Also, write the profit function. C(x) = 160x + 1200 and R(x) = 140x The break-even quantity is- 60 units What would the manager decide to do in this case? yA. The manager would decide to not go ahead with the production O B. The manager would decide to go ahead with the production Write the profit function Px)(Simplify your answer.)

Explanation / Answer

Profit Function is given by R(x)-C(x)=140x-160x-1200= -20x-1200

Here, as per normal convention, R(x) is the Revenue Function while C(x) is the Cost function.

Revenue-Cost=Profit

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