Question

A company manufacturers pet rock, which they sell for $17.98 each. Their fixed costs are $98,000 per year and each rock $12.30 to make.Find their cost, revenue, and profit functions in terms of x

Answer 1

• C(x) = 98000+12.30x
• R(x) = 17.98x
• P(x) = 5.68x -98000

Explanation:

The cost function is the sum of fixed costs and the cost of making x number of pet rocks:

C(x) = 98000 +12.30x

The revenue is generated by the sale of the rocks. It is the product of selling price and the number sold.

R(x) = 17.98x

Profit is the difference between revenue and cost.

P(x) = R(x) -C(x) = 17.98x -(98000 +12.30x)

P(x) = 5.68x -98000