OK. 2. Company manufactures and sells bikes. Each bike costs M R.O to make. The company's...

OK.

2. Company manufactures and sells bikes. Each bike costs M R.O to make. The company's fixed costs are 500 R.O. In addition, the company owners know that the price of each bike comes from the price function p= 60 - 1/2 x

(Note: Mis the first two digit from your MEC ID after alphabetic (S or F), for example if the ID is 19F18140 take the two digit after F which are 18)

a. Find the Break-even point of the company
b. Find the numnber of bikes at maximum profit of the company
C. Find the maximum revenue the company earned

This is what was mentioned in the question

Solutions

Expert Solution

a) At breakeven, total revenue equals total cost. Applying this logic, we end up at x=69.64 be the breakeven number of bikes. The working is shown below.

At profit maximization, the marginal cost equals the marginal revenue. Carrying out this constraint, we get the value of x to be 42. The working is shown below.

Using simple calculus, we can find the solution for this question. R_max = 1800. For working, check the image below.

Hope this helps. Do hit the thumbs up. Cheers!

Rahul Sunny answered 1 year ago

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