Yahoo Answers 04-13 pt 2
- Michael Brown
2. A company manufactures computer chairs so that the cost of producing x chairs is given by C(X)=200+35x while the revenue for the sales of computer chairs is R(X)=1000-0.12x^3. a. write the equation for average cost, marginal cost, marginal revenue, profit. b. how many units must be sold to break even? c. how many units must be produced and sold in order to maximize profit? d. what is the maximum profit?
a. Average cost would be total cost divided by number of units or (200+35x)/x Marginal Cost is the derivative of the cost function which in this case is constant 35 Marginal Revenue is the derivative of the Revenue or -.36x^2 b. The break-even point is where cost=revenue (I cheated and looked at the graph) and it is 13 units c. The weird thing is the revenue is decreasing as more units are produced so the units to produce and sell would be 1 unit. d. The profit would be R(1)-C(1)=764.88 but I'm thinking something got garbled.