A manufacturer sells watches for $80 per unit. The fixed costs related to this product are $8,000 per month, and the variable costs are $60 per unit. This gives a profit function , where r is the revenue per unit and c is the variable cost per unit. If the manufacturer has a profit of zero, how many watches were sold?
A)800
B)4,000
C)400
D)100
E)133

Question

A manufacturer sells watches for $80 per unit. The fixed costs related to this product are $8,000 per month, and the variable costs are $60 per unit. This gives a profit function  , where r is the revenue per unit and c is the variable cost per unit. If the manufacturer has a profit of zero, how many watches were sold? ​
A)800 
B)4,000 
C)400 
D)100 
E)133

Quizplus · Accepted Answer

Let's start by setting up the profit function:

Profit = Revenue - Variable Costs - Fixed Costs
0 = (80 * x) - (60 * x) - 8,000

Where x is the number of watches sold.

Simplifying the equation, we get:

20x = 8,000
x = 400

Therefore, the manufacturer sold 400 watches to break even (have a profit of zero). The answer is C.

A Manufacturer Sells Watches for $80 Per Unit