BRKEVNWK_Linear.14A - COST/REVENUE/PROFIT/BREAKEVEN...

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BRKEVNWK Linear.14A 3/17/2009 Professor Polenzani COST/REVENUE/PROFIT/BREAKEVEN WORKSHEET A. Fill in the cost and revenue functions with the given "x" values: X = Units C(x) = 20X + 1800 R(x) = 80X 0 10 11 30 100 B. Fixed Cost: The fixed cost is the value of the cost function when X is zero. For this problem, the fixed cost is $ . This is the cost to produce zero units. ..these might be considered the "start-up" expenses. ..initial equipment, license fees, security deposit. The fixed cost is also the y-intercept of the function. C. Marginal Cost per unit/Variable Cost per unit : C(11) = C(10) = C(11) -- C(10) = . This value is called the marginal cost per unit. Check an Econ or Accounting Book to find the definition of marginal cost: The marginal cost is also the slope of the function. D. The y-intercept of the revenue function is . The slope of the revenue function is . This represents the price per unit or the selling price of each item. This value is also called the marginal revenue.
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