Production

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May 12, 2012
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The Cost of Producing 1250 UNITS is $45,000. The cost of producing 1500 UNITS is $50,000. Each unit produced can be sold for $30.
Assume a linear relation between the variables
(a) Find The Cost (b) Find The Revenue (c) Find the Profit

PART A: M=50000-45000
FIND COST ___________
1500-1250 M=20 The cost is 20 dollars per unit
50,000=20(1500)+b
50,000-30,000=20,000 b=20,000
Would I use the Cost Function: C(z)= 20z+20,000
PART B:
FIND THE REVENUE

Would this be (Price*Quantity)? If so then:
1500*$30=$45,000
1250*$30=$37,500
P(z)=30z

PART C: FIND THE PROFIT

(Revenue-cost)
30z-(20z+20000)
30z-20z-20,000
P(z)=10z-20,000

Is this right?
 
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