Question 1176859: Let C(Q) denote the cost of producing Q units per month of a commodity.
i. what is the interpretation of C
ii.Suppose price obtained per unit is fixed at 30 and that the current output per month is 1000. Is it profitable to increase production?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! c is the name of the function.
q is the argument of the function.
if the price per unit is fixed at 30, then c(q) = 30 * q.
if q = 1000, then you replace q in the function with 1000 to get c(1000) = 30 * 1000.
if you assume that the sale price is greater than the cost, and the relationship between the sale price and the cost remains the same, and you can sell the additional number of units that you produce, then you will make more profit if you manufacture and sell more units.
however, there is no guarantee that you will make more profit if you manufacture more units.
the cost of manufacture might increase; the demand may not be there for more units to placed on the market.
anything can happen to upset the relationship between revenue and cost and demand and, consequently, profit.
bottom line is you don't have enough information to determine if increasing production will lead to more profit.
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