Explanation Given information: Given, a company producing jigsaw puzzles has fixed costs of $6000 and variable costs of $2 per puzzle. The company sells the puzzles for $5 each. Calculation: Here, the fixed cost is $6000 and the variable cost is $2. So when the number of puzzles is q, the cost function C is given by C ( q ) = 6000 + 2 q Also, here the marginal revenue is $5. So when the number of puzzles is q, the revenue function R is given by R ( q ) = 5 q The profit is given by the difference of cost function and revenue function To determine (b) To graph: To sketch a graph of R ( q ) and C ( q ) on the same axes and to find the break-even point, q 0 for the company.

6th Edition

ISBN: 9781119399353

Author: DA

Publisher: JOHN WILEY+SONS,INC.-CONSIGNMENT

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Question

Chapter 1.4, Problem 20P

To determine

(a)

To find the formulas for the cost function, the revenue function and the profit function.

To determine

(b)

To graph:

To sketch a graph of R ( q ) and C ( q ) on the same axes and to find the break-even point, q₀ for the company.

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Chapter 1.4, Problem 19P

Chapter 1.4, Problem 21P

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(a) To find the formulas for the cost function, the revenue function and the profit function.

Solution Summary: The author analyzes how a company producing jigsaw puzzles has fixed costs of 6000 and variables of 2 per puzzle. The cost function C is given by C(q)=6000+2