Applied Calculus Review Questions

Question

A restaurant specializes in its chicken sandwich. The restaurant has fixed costs of $2700. Each chicken sandwich costs $.70 to make and is sold for $2.50 each. Let x be the number of chicken sandwiches made. 

 

1. What is the cost function?

 

2. What is the profit function?

 

3. What is the break even number of sandwiches?

 

4. What is the marginal revenue?

Answer 1

  Hi Cassie,

 

Cost =    -.70x -2500  

 

Profit  =  2.50 x -.70x -2500    Set your profit = 0  for breaking even.....  or 1.8x -2500 = 0 

 

The resturant will have to sell x = 1388.88 sandwiches (really 1389) to just break even.  Does that make sense?

 

So the marginal revenue to make that extra sandwich generally is found by taking the price (2.50) minus the cost (.70).

 

Bob