Question

A company makes pens. They sell each pen for $ 10 .Their revenue is represented by R = 10 x .The cost to make the pens is $ 3 each with a one time start up cost of $ 6500 .Their cost is represented by C = 3 x + 6500 .a) Find the profit, P, (P = R - C) when the company sells 1000 pens.

Answer 1

The revenue is given by R = 10x

The cost is given by C= 3x+6500, in whixch $6500 is the start up cost.

a) Find the profit when the company sells 1000 pens:

Profit = Revenue - Cost

x= 1000 pens; substituting that in the formula, we have:

P= 10*1000 - (3*1000+6500)

P = 10000 -9500

P = 500 dollars

Answer: The profit is 500 dollars

In order to break even, we need to have

Revenue = Cost

10x = 3x +6500

10x-3x = 6500

7x = 6500

x = 928.57

As we're dealing with pens, we need whole amounts of it. So, if you have 929 pens produced, you'll break even.

Answer: 929 pens to break even