SOLUTION: Finicky-Cat Gourmet Pet Food makes organic cat food and sells them in 2 kg bags. The company has annual fixed costs of $150,000 and variable costs of $4 per bag. Finicky-Cat sells
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Question 1165323: Finicky-Cat Gourmet Pet Food makes organic cat food and sells them in 2 kg bags. The company has annual fixed costs of $150,000 and variable costs of $4 per bag. Finicky-Cat sells each bag for $10. Production capacity is 50,000 bags per year.
A.) Find the revenue and cost equation.
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
Let 
represent the number of items actually produced. We know that 
, but that fact is irrelevant at this point because we are not dealing with a profit function. Let 
where 
represent the quantity sold. Then:
\ =\ 4q_p\ +\ 150000)
\ =\ 10q_s)
If you make the utterly irrational assumption that the factory produces at full capacity and the company sells every single bag produced, then:
\ =\ 350000)
\ =\ 500000)
John
My calculator said it, I believe it, that settles it
I > Ø
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