Formulas: Suppose a firm has fixed cost of F dollars, production cost of c dollars per unit and selling price of s dollars per unit then C(x) = R(x) = P(x) = Where x is the number of units of the commodity produced and sold. Example 3: A manufacturer has a monthly fixed cost of $150,000 and a production cost of $18 for each unit produced. The product sells for $24 per unit. a. What is the cost function? b. What is the revenue function? c. What is the profit function? d. Compute the profit (loss) corresponding to production levels of 22,000 and 28,000. e. How many units must the company produce and sell if they wish to make a profit of $40,000?

Math 1313 Section 1.5 3Example 4: Auto Time, a manufacturer of 24-hour variable timers, has a fixed monthly cost of $56000 and a production cost of $10 per unit manufactured. The timers sell for $17 each. a. What is the cost function? b. What is the revenue function? c. What is the profit function? d. Compute the profit (loss) corresponding to the production and sale of 4,000, 8,000 and 10,000 timers. Break-Even Point

Math 1313 Section 1.5 4Example 5:Find the break-even quantity and break-even revenue if C(x) = 110x + 40,000 and R(x) = 150x. Example 6:The XYZ Company has a fixed cost of 20,000, a production cost of $12 for each unit produced and a selling price of $20 for each unit produced.