Question

the manufacturer of widgets spends $5 to make each widget and sells them for $8. The manufacturer also has fixed costs each month of $1200. Find the cost function C when x widgets are manufactured.

Answer 1

C(x)=5x+1200

Explanation:

The general Cost function formula is given by

C(x)=cost per unit⋅x+fixed costs.

The manufacturer has fixed costs of $1200 no matter how many widgets it produces. In addition to the fixed costs, the manufacturer also spends $5 to produce each widget. If we substitute these values into the general cost function, we find that the cost function when x widgets are manufactured is given by

Answer 2

R(x)=8x

Explanation:

We get the total revenue by multiplying the revenue per unit times the numbers of units sold, so the general Revenue function is given by

R(x)=selling price per unit⋅x.

The manufacturer sells each widget for $8 so the Revenue function is

R(x)=8x.