Hmwk 1 Solution

Hmwk 1 Solution - Homework 1 Solution Spring 2011 Dr. Zhang...

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Homework 1 Solution Spring 2011 Dr. Zhang 1. #13 on page 21 Projected fee = $300/student Cost of conference room, … = $4800 (fixed cost) Computer rent = $30 /day Two-day seminar: $60 /computer (variable cost) a. Total cost C( x ) = 4800 + 60 x b. Total Revenue R( x ) = 300 x Total profit P( x ) = Total Revenue - Total Cost = 300 x - (4800 + 60 x ) = 240 x - 4800 c. Total profit P(30) == 240(30) - 4800 = 2400 d. P( x )=0 240 x - 4800 = 0 x = 4800/240 = 20 The breakeven point is 20 students. 2. #14 on page 22 Fixed cost = $80,000 Variable cost = $3/book Demand = 4000 copies Selling price = $20/book a. let x denote the number of copies of book sold Total Revenue R( x ) = 20 x Total cost C( x ) = 80,000 + 3 x Profit P( x ) = Revenue - Cost = 20 x - (80,000 + 3 x ) = 17 x - 80,000 17 x - 80,000 = 0 17 x = 80,000 x = 4706 Breakeven point = 4706 b. P(4000) = 17(4000) - 80,000 = -12,000 Thus, a loss of $12,000 is anticipated.
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c. Let p be the price Profit P( x ) = px - (80,000 + 3 x ) x
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This document was uploaded on 04/02/2011.

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Hmwk 1 Solution - Homework 1 Solution Spring 2011 Dr. Zhang...

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