Math Problem Statement

A firm produces a product that has the production cost function C(x) = 270x + 9630 and the revenue function R(x) = 360x. No more than 45 units can be sold. Find and analyze the break-even quantity, then find the profit function.

Solution

In the uploaded image, you are dealing with a production problem involving a cost function C(x)C(x) and a revenue function R(x)R(x). Here's the given information:

  • Cost Function: C(x)=270x+9630C(x) = 270x + 9630, where xx is the number of units produced.
  • Revenue Function: R(x)=360xR(x) = 360x.

You are asked to:

  1. Find and analyze the break-even quantity.
  2. Write the profit function P(x)P(x).

Step 1: Break-even Quantity

The break-even point occurs when the cost and revenue are equal, meaning C(x)=R(x)C(x) = R(x).

Let's solve for xx:

270x+9630=360x270x + 9630 = 360x

Subtract 270x270x from both sides:

9630=360x270x9630 = 360x - 270x

9630=90x9630 = 90x

Now, divide both sides by 90:

x=963090=107x = \frac{9630}{90} = 107

Thus, the break-even quantity is 107 units.

Step 2: Profit Function

The profit function is defined as the difference between the revenue and the cost:

P(x)=R(x)C(x)P(x) = R(x) - C(x)

Substitute the given functions for R(x)R(x) and C(x)C(x):

P(x)=(360x)(270x+9630)P(x) = (360x) - (270x + 9630)

Simplify:

P(x)=360x270x9630P(x) = 360x - 270x - 9630

P(x)=90x9630P(x) = 90x - 9630

So, the profit function is:

P(x)=90x9630P(x) = 90x - 9630

Conclusion

  1. The break-even quantity is 107 units.
  2. The profit function is P(x)=90x9630P(x) = 90x - 9630.

Would you like more details or explanations?

Here are 5 related questions you might find useful:

  1. What happens if the production level is exactly at the break-even point?
  2. How does the profit change when producing 110 units instead of 107?
  3. What is the revenue when producing 45 units?
  4. Can the company make a profit if they produce 50 units?
  5. How would changes in the cost per unit affect the break-even quantity?

Tip: Always check the intersection between cost and revenue functions for analyzing profit margins.

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Math Problem Analysis

Mathematical Concepts

Linear Functions
Break-even Analysis
Profit Calculation

Formulas

C(x) = 270x + 9630 (Cost function)
R(x) = 360x (Revenue function)
Break-even point: C(x) = R(x)
Profit function: P(x) = R(x) - C(x)

Theorems

Break-even point theorem (Cost equals Revenue)
Linear Profit Theorem

Suitable Grade Level

Grades 10-12