A Textbook company had fixed costs for $25,000 and a variable cost of $20 for a certain book. The company sells the books for $45 each.

Question

(A) Find the formula for the COST, REVENUE, AND PROFIT FUNCTIONS

 

 

(B) What is the break even point q^o for the company?

Answer 1

The cost function would be   C(x) = 20x + 25,000 and the revenue function would be R(x) = 45x  Since the profit is the amount of money taken in minus the cost,  the profit function is P(x) = R(x) - C(x) = 45x - ( 20x + 25,000)  or after simplifying   P(x) = 25x - 25,000     The break even point is the number of books sold when the revenue equals the cost. Therefore              45x = 25x +25,000  Solving this equation produces a result of 1,000 books