A manufacturer has a monthly fixed cost of $50,000 and a production cost of $6 for each unit produced. The product sells for $13/unit. What is the cost function? What is the revenue function? What is the profit function?

Question

A manufacturer has a monthly fixed cost of $50,000 and a production cost of $6 for each unit produced. The product sells for $13/unit. What is the cost function? What is the revenue function? What is the profit function? ​

Quizplus · Accepted Answer

The cost function is the sum of the fixed cost and the variable cost, which is $6 per unit produced. Thus, C(x) = 6x + 50,000. The revenue function is simply the price per unit multiplied by the number of units sold, which is 13x. The profit function is the revenue minus the cost, so P(x) = 13x - (6x + 50,000) = 7x - 50,000.

A Manufacturer Has a Monthly Fixed Cost of $50,000 and a Production