04 Profit Revenue Problems Maximizing Revenue Solution

MCR3U1 Date: ___________________ Day 4: Min & Max WORD PROBLEMS 1 Chapter 3: Quadratic Relations Solving Problems Involving Cost, Revenue, Profit The cost function C(x) is the total cost of making x items. If the cost per item is fixed, it is equal to the... Plus

MCR3U1 Date: ___________________ Day 4: Min & Max WORD PROBLEMS 1 Chapter 3: Quadratic Relations Solving Problems Involving Cost, Revenue, Profit The cost function C(x) is the total cost of making x items. If the cost per item is fixed, it is equal to the cost per item (c) times the number of items produced (x), or C(x) = cx. The price function p(x) – also called the demand function – describes how price affects the number of items sold. Normally, when the price increases, customers will not demand as many items, and so x will decrease. To sell more items, the price usually has to decrease. The revenue function R(x) is the income from sales. It is equal to the price times the number sold, or R(x) = xp(x). The profit function P(x) is the money that is left over from the revenue (income) after the costs (expenses) have been subtracted. In other words, P(x) = R(x) – C(x). The break-even point occurs when the total revenue equals the total cost - or, in other words, when the profit is ze Moins