A small business produces and sells a gardening tool for $25 each. Each month it pays $2,800 in rent for its facility and $2,200 in salaries. Each tool costs $10 to produce and incurs a cost of 3% of the selling price per tool for marketing and distribution. (a) What is the revenue function? R(x) = = (b) What is the marginal cost? $ (c) In terms of this problem, what does marginal cost represent? O The rate of change of costs with respect to selling price O The total change in costs that comes from producing one more garden tool The net cost to produce one garden tool O The total change in garden tools produced that comes from increasing costs by one dollar
A small business produces and sells a gardening tool for $25 each. Each month it pays $2,800 in rent for its facility and $2,200 in salaries. Each tool costs $10 to produce and incurs a cost of 3% of the selling price per tool for marketing and distribution. (a) What is the revenue function? R(x) = = (b) What is the marginal cost? $ (c) In terms of this problem, what does marginal cost represent? O The rate of change of costs with respect to selling price O The total change in costs that comes from producing one more garden tool The net cost to produce one garden tool O The total change in garden tools produced that comes from increasing costs by one dollar
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:A small business produces and sells a gardening tool for $25 each. Each month it pays $2,800 in rent for its
facility and $2,200 in salaries. Each tool costs $10 to produce and incurs a cost of 3% of the selling price
per tool for marketing and distribution.
(a) What is the revenue function? R(x)
(b) What is the marginal cost? $
(c) In terms of this problem, what does marginal cost represent?
O The rate of change of costs with respect to selling price
The total change in costs that comes from producing one more garden tool
The net cost to produce one garden tool
The total change in garden tools produced that comes from increasing costs by one dollar
(d) What is the fixed cost? $
=
(e) The break-even volume per month is
gardening tools.
Transcribed Image Text:(d) What is the fixed cost? $
(e) The break-even volume per month is
gardening tools.
(f) The level of output (volume) required to earn a net income of $2,282 per month is
gardening tools.
(g) Suppose
(i) monthly rent rises by $300;
(ii) monthly salaries rise to $2,450; and
(iii) the cost to produce each tool decreases by 25%.
What is the new cost function? C(x) =
=
The new break-even volume is
gardening tools per month.
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