Question

In: Economics

Suppose a company has fixed costs of $5,500 and variable costs per unit of  7/8x + 1,040...

Suppose a company has fixed costs of $5,500 and variable costs per unit of  7/8x + 1,040 dollars, where x is the total number of units produced. Suppose further that the selling price of its product is 1,200 − 1/8 x dollars per unit.

(a)

Form the cost function and revenue function (in dollars).

C(x)

=

R(x)

=

Find the break-even points.

x =

50,110

(b)

Find the vertex of the revenue function.

(x, y) =

  

Identify the maximum revenue.

$

(c)

Form the profit function from the cost and revenue functions (in dollars).

P(x) =

Find the vertex of the profit function.

(x, y) =

  

Identify the maximum profit.

$

(d)

What price will maximize the profit? (Round your answer to the nearest cent.)

Solutions

Expert Solution

page 2

Rahul Sunny answered 1 year ago
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