Question

What does annual profit equal if 10,000 units are produced and sold during the year?

Answer 1

Step-by-step explanation:

Solution:

a) Total cost function = C(x) = 23x + 400000

b) Total Revenue function = price * quantity sold = R(x) = 55x

c) Total profit function = Total Revenue – C(x) = P(x) = 55x – (23x + 400000)

P(x) = 32x - 400000

d) If x= 10000 then P(10000)= 32(10000) – 400000 = -80000 (This means $80000 loss)

e) P(x) = 0 then x = ? 0 = 32x – 400000, 32x = 400000 , x = 12500

This means if 12500 units of product produced and sold, then zero profit is earned.

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