Finite Chapter 1.4

Finite Chapter 1.4 - Math 120 SP08 SBrodnick 1.4: Linear...

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Math 120 SP08 SBrodnick 1 1 1.4 : Linear Models 2 1.4: Linear Models Example : 1. A cell phone provider charges 15¢ per minute, plus a $20 monthly fee. a. what is the monthly bill if you use 100 minutes? b. find monthly cost C if you use x minutes * Slope 0.15 is Cost per minute --» Marginal Cost is $0.15 Varying quantity is 0.15x --» Variable Cost is $0.15x y-intercept is 20 --» Fixed Cost is $20 3 * Cost Function : cost C of producing x items * Linear Cost Function: C(x) = mx + b * Revenue Function : revenue R of selling x items * Linear Revenue Function: R(x) = mx * Profit Function : profit P of producing and selling x items * Profit = Revenue – Cost P(x) = R(x) – C(x) 1.4: Linear Models m arginal cost fixed cost m arginal revenue (price per item) 4 Example : 2. A t-shirt company can make 1000 t-shirts for $1750 and 2000 t-shirts for $2560. a. Linear cost function b. Fixed cost? Marginal cost? c. The company sells each t-shirt for $15.
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This note was uploaded on 04/07/2008 for the course MAT 120 taught by Professor Brodnick during the Spring '08 term at Illinois State.

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Finite Chapter 1.4 - Math 120 SP08 SBrodnick 1.4: Linear...

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