A manufacturer has a monthly fixed cost of $45,000 and a production cost of $9 for each unit produced. The product sells for $40/unit. What is the cost function? What is the revenue function? What is the profit function?
A) C(x) = 9x + 45,000, R(x) = 40x and P(x) = 31x - 45,000
B) C(x) = 40x + 9, R(x) = 9x and P(x) = -31x + 45,000
C) C(x) = 40x + 45,000, R(x) = 45,000x and P(x) = 31x - 45,000
D) C(x) = 9x + 45,000, R(x) = 9x and P(x) = 31x + 45,000
E) C(x) = 9x + 45,000, R(x) = 45,000x and P(x) = 31x + 45,000

Question

Quizplus · Accepted Answer

- The cost function is given by: C(x) = fixed cost + variable cost per unit * number of units produced = 45,000 + 9x, where x is the number of units produced.
- The revenue function is given by: R(x) = price per unit * number of units sold = 40x, where x is the number of units sold.
- The profit function is given by: P(x) = revenue - cost = R(x) - C(x) = 40x - (45,000 + 9x) = 31x - 45,000.
Therefore, the correct choice is A.

A Manufacturer Has a Monthly Fixed Cost of $45,000 and a Production