Question

Alfred has plotted revenue and cost graphs for his pastry business. He's testing a number of cost assumptions against his business's revenue. Two graphs of revenue and cost in which revenue graph price on the x-axis and revenue in dollars on the y-axis. A downward parabola vertex at (6, 1800) and intercept the origin and x-axis at (12, 0). The cost graph has a linear function. Which two statements correctly interpret the graphs?

1) Cost falls and revenue rises up to approximately 6 per pastry. After approximately 6, both cost and revenue fall.
2) Costs continue to fall beyond approximately 6 because of an increase in revenue.
3) Revenue continues to rise regardless of the change in price.
4) Revenue falls and cost rises up to approximately 17.

Answer 1

The correct statements interpreting Alfred's revenue and cost graphs are that cost falls and revenue rises up to approximately 6 per pastry, after which both start to fall, and that revenue falls and cost rises as more pastries are produced. The correct answer are 1, 4.

Step-by-step explanation:

The interpretation of Alfred's revenue and cost graphs for his pastry business can be analyzed based on the provided descriptions. The revenue graph for his business is a downward parabola with a vertex at (6, 1800), which suggests that revenue increases as price per pastry increases up to 6 pastries, after which revenue begins to decrease.

Since the parabola intersects the origin and x-axis at (12, 0), it indicates that revenue starts at $0, rises to a peak at 6 pastries, and then falls back to $0 at 12 pastries. Contrarily, the cost graph is a linear function that likely starts with fixed costs on the y-axis and increases linearly as more pastries are produced.

In light of this information, the correct statements about Alfred's graphs are: 1) Cost falls and revenue rises up to approximately 6 per pastry. After approximately 6, both cost and revenue fall. and 4) Revenue falls and cost rises up to approximately 17.

The other statements are incorrect because 2) suggests costs continue to fall with an increase in revenue beyond 6, which contradicts the linear nature of the cost graph, and 3) implies that revenue continues to rise indefinitely, which is not the case as indicated by the parabolic shape of the revenue graph.

Hence the correct option is 1, 4.