Question

A company makes pens. They sell each pen for $9.

Their revenue is represented by R = 9 x.
The cost to make the pens is $3 each with a one time start up cost of $6000.
Their cost is represented by C = 3 x + 6000.
a) Find the profit, P, (P = R - C) when the company sells 1000 pens.
0
9000
-9000
15000
-3000
b) Find the number of pens they need to sell to break even (when R = C).
667
1000
1100
2000

Answer 1

a) 0

b) 1000

Explanation:

revenue = R = 9x

cost = C = 3x + 6000

profit = P = R - C

(a)

P = R - C

P = 9x - (3x + 6000)

P = 9x - 3x - 6000

P = 6x - 6000

For 1000 pens, x = 1000.

P = 6(1000) - 6000

P = 6000 - 6000

P = 0

Answer: 0

(b)

R = C

9x = 3x + 6000

6x = 6000

x = 6000/6

x = 1000

Answer: 1000