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Worked Examples · Example 6

Q.For a certain product, the revenue function is R(x)=60xR(x) = 60x and the cost function is C(x)=20x+8000C(x) = 20x + 8000, where xx is the number of units sold.

(i) Find the profit function P(x)P(x).
(ii) Find the break-even quantity (the output at which profit is zero).
(iii) Find the profit when 300300 units are sold.
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  1. Profit function.

    P(x)=R(x)−C(x)=60x−(20x+8000)=40x−8000P(x) = R(x) - C(x) = 60x - (20x+8000) = 40x - 8000

  2. Break-even quantity. Break-even occurs where profit is zero:

    40x−8000=0⇒40x=8000⇒x=200 units40x - 8000 = 0 \Rightarrow 40x = 8000 \Rightarrow x = 200 \text{ units}

    Independent cross-check: at x=200x=200, R(200)=60(200)=12,000R(200)=60(200)=12{,}000 and C(200)=20(200)+8000=4000+8000=12,000C(200)=20(200)+8000=4000+8000=12{,}000 — revenue exactly equals cost, confirming break-even. …

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