A Company produces and sells two types of smart phones. The price of Type-1 and Type...

A Company produces and sells two types of smart phones. The price of Type-1 and Type –II smart phone assigned by Hamza is Rs. 120,000 per unit and 135,000 respectively. Variable cost for producing type-I phone is Rs. 150,000 and type –II is Rs. 300,000. Suppose there is Rs. 500,000 fixed cost.1. Formulate revenue and cost function for type-I and type-II smart phone jointly.2. Formulate total profit function3. What will be the total profit if Hamza produces and sells 500 sets of type-I and 750 sets of type – II.

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Expert Solution

The correct answer with step by step explanation is given below:

Note!

As it is not mentioned whether the variable cost for both the products is per unit or total variable cost, it has been assumed that it is total variable cost and accordingly the cost function has been derived. If you want to take it variable cost per unit then simply multiply it with number of units.

Rahul Sunny answered 1 year ago

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