Question 106474
C(q) = 0.52 q + 30,000. They can sell each unit for 0.80cents
a) what are the two parameters of the cost equation
Startup cost is $30,000
Cost of producing each unit is 52 cents or $0.52
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b) what is the profit equation P(q)?
Income function: I(q)=0.80q
Profit function: P(q)=I(q)-C(q)
P(q)= 0.80q-(0.52q+30000)
P(q)= 0.28q - 30,000
c) How many units must be sold to make a profit of $250,000?
250,000 = 0.28q - 30,000
0.28q = 280,000
q = 1,000,000
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More than one million units must be sold to make a profit.
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Cheers,
Stan H.