Try Magic Notes and save time.Try it free
Try Magic Notes and save timeCrush your year with the magic of personalized studying.Try it free
Question

A company producing jigsaw puzzles has fixed costs of $6000\$ 6000 and variable costs of $2\$ 2 per puzzle. The company sells the puzzles for $5\$ 5 each. Find formulas for the cost function, the revenue function, and the profit function.

Solution

Verified
Answered 1 year ago
Answered 1 year ago
Step 1
1 of 4

Let's remember that the total cost can be determined as

Total cost=Fixed cost+Variable costC(q)=Fixed cost+qItem cost(1)\begin{aligned} \text{Total cost}&=\text{Fixed cost}+\text{Variable cost}\\ C(q)&=\text{Fixed cost}+q\cdot\text{Item cost}\tag{1} \end{aligned}

and the revenue can be determined as

Revenue=PriceQuantityR(q)=pq(2)\begin{aligned} \text{Revenue}&=\text{Price}\cdot\text{Quantity}\\ R(q)&=p\cdot q\tag{2} \end{aligned}

Also, the profit can be calculated as

Profit=RevenueCostπ=R(q)C(q)(3)\begin{aligned} \text{Profit}&=\text{Revenue}-\text{Cost}\\ \pi&=R(q)-C(q) \tag{3}\end{aligned}

where qq number of items, pp the price per item.

Create an account to view solutions

Create an account to view solutions

Recommended textbook solutions

Thomas' Calculus 14th Edition by Christopher E Heil, Joel R. Hass, Maurice D. Weir

Thomas' Calculus

14th EditionISBN: 9780134438986 (3 more)Christopher E Heil, Joel R. Hass, Maurice D. Weir
10,144 solutions
Applied Calculus 3rd Edition by Flath, Gleason, Hughes-Hallett, Lock

Applied Calculus

3rd EditionISBN: 9780471681212Flath, Gleason, Hughes-Hallett, Lock
3,394 solutions
Calculus: Early Transcendentals 8th Edition by James Stewart

Calculus: Early Transcendentals

8th EditionISBN: 9781285741550 (4 more)James Stewart
11,084 solutions
Calculus: Early Transcendentals 9th Edition by Daniel K. Clegg, James Stewart, Saleem Watson

Calculus: Early Transcendentals

9th EditionISBN: 9781337613927 (3 more)Daniel K. Clegg, James Stewart, Saleem Watson
11,049 solutions

More related questions

1/4

1/7