Revenue Function From Cost Function

Since profit is the difference between revenue and cost the profit functions the revenue function minus the cost function.

Revenue function from cost function. The equation for the cost function is. Revenue function multiply the output level by the price function. Profit function p x total income minus total cost. This function is extremely useful it can tell us for example how many glasses of lemonade we would need to sell to.

Graphs of revenue cost and profit functions for ice cream bar business at price of 1 50. P x r x c x marginal is rate of change of cost revenue or profit with the respect to the number of units. Write the revenue function r from the sale of x pairs of running shoes. Cost revenue profit functions cost functions cost is the total cost of producing the output.

2 a business costs include the fixed cost of 5000 as well as the variable cost of 40 per bike. Then you will need to use the formula for the revenue r x p x is the number of items sold and p is the price of one item. For low volumes there are few units to spread the fixed cost so the average cost is very high. Find the revenue function.

Note we are measuring economic cost not accounting cost. π r c 1 2 q. Determine the break even point. C 40 000 0 3 q where c is the total cost.

Revenue function reflects the revenue from. For our simple lemonade stand the profit function would be. Cost function c x total cost of producing the units. Essentially the average cost function is the variable cost per unit of 0 30 plus a portion of the fixed cost allocated across all units.

After some research a company found out that if the price of a product is 50 dollars the demand is 6000. Additionally it costs 30 to produce each pair of shoes. A company that manufactures running shoes has a fixed cost of 300 000. This means differentiate the cost revenue or profit.

However if the price is 70 dollars the demand is 5000. Variable cost fixed cost c x f v x c total cost f fixed cost v variable cost per unit x no. To obtain the cost function add fixed cost and variable cost together. It consists of the ff.

Of units produced units sold revenue functions revenue is the total payment received from selling goods or performing services. Write the cost function c of producing x pairs of running shoes. They are sold at 80 a pair. Profit 0 50 x 50 00 0 10 x 0 40 x 50 00.

Profit r c. The profit function is just the revenue function minus the cost function. In symbols π r c p q f v q.