Find the break-even point for the firm whose cost function C and revenue function R are given. C(x) = 5x + 10,000; R(x) = 15x
A) For a break-even operation, the firm should manufacture 10,000 units of its product, resulting in a break-even revenue of $15,000.
B) For a break-even operation, the firm should manufacture 10,000 units of its product, resulting in a break-even revenue of $7,500.
C) For a break-even operation, the firm should manufacture 1,000 units of its product, resulting in a break-even revenue of $7,500.
D) For a break-even operation, the firm should manufacture 1,000 units of its product, resulting in a break-even revenue of $15,000.

Question

Quizplus · Accepted Answer

To find the break-even point, set the cost function equal to the revenue function: 5x + 10,000 = 15x. Solving for x gives x = 1,000 units. Substituting x = 1,000 into the revenue function R(x) = 15x gives a break-even revenue of $15,000.

Find the Break-Even Point for the Firm Whose Cost Function