In: Finance
An insurance company claims that for x thousand policies, its monthly revenue in dollars is given by R(x)=225x and its monthly cost in dollars is given by C(x)=180x+16,200
A) find the break even point
B) grap the revenue and cost equations on the same axes
C) from the graph estimate the revenue and cost when x=180
A)
Break even point can be calculated by equating the revenue and cost equation.
Thus, break even point will be at 360 thousand policies.
B)
Using excel to plot the graph and take different values for x and find corresponding revenue and cost.
C)
When x is 180, the revenue will be 40,500 thousand.
When x is 180, the cost will be 48,600 thousand.