A company can produce 25 items for a total cost of $ 2250 with a fixed cost of $ 1000 and a selling price of $ 75. Find the cost, revenue, and profit function. Find the break even point. Sketch on the same graph the revenue and cost function and clearly label where the break even point is. When does the company have profit? Explain.

A company can produce 25 items for a total cost of $ 2250 with a fixed cost of $ 1000 and a selling price of $ 75. Find the cost, revenue, and profit function. Find the break even point. Sketch on the same graph the revenue and cost function and clearly label where the break even point is. When does the company have profit? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A company can produce 25 items for a total cost of $ 2250 with a fixed cost of $ 1000 and a selling price of $ 75.

Find the cost, revenue, and profit function.
Find the break even point.
Sketch on the same graph the revenue and cost function and clearly label where the break even point is.
When does the company have profit? Explain.

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Step 2: 1. Find cost, revenue and profit function

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Step 3: 2. Find the breakeven point

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Step 4: 3. Sketch the graph

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Step 5: 4. Determine the point when the company starts to earn profit

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