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NCERT Exemplar · Q7

Q.A company manufactures cassettes. Its cost and revenue functions are C(x)=26,000+30xC(x) = 26{,}000 + 30x and R(x)=43xR(x) = 43x, respectively, where xx is the number of cassettes produced and sold in a week. How many cassettes must be sold by the company to realise some profit?

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Profit occurs when revenue exceeds cost; solving 43x>26,000+30x43x > 26{,}000 + 30x gives x>2,000x > 2{,}000, so the company must sell at least 2,001 cassettes to realise profit.

Profit is what remains after subtracting all costs from revenue. A company breaks even when R(x)=C(x)R(x) = C(x), loses money when R(x)<C(x)R(x) < C(x), and makes profit when R(x)>C(x)R(x) > C(x). The question asks for the minimum production level at which profit becomes positive.

The cost function C(x)=26,000+30xC(x) = 26{,}000 + 30x has two parts: a fixed cost of ₹26,000 (overhead, rent, equipment—expenses that don't depend on production volume) and a variable cost of ₹30 per cassette. The revenue function R(x)=43xR(x) = 43x means each cassette sells for ₹43. The company earns ₹13 per cassette sold (the difference 43−3043 - 30), but must first recover that ₹26,000 fixed cost.

Finding the break-even point

  1. Set revenue equal to cost to find where profit is exactly zero:

43x=26,000+30x43x = 26{,}000 + 30x

  1. Collect like terms by subtracting 30x30x from both sides:

43x−30x=26,00043x - 30x = 26{,}000

13x=26,00013x = 26{,}000

  1. Solve for xx:

x=26,00013=2,000x = \frac{26{,}000}{13} = 2{,}000

At exactly 2,000 cassettes, the company breaks even: revenue and cost are both ₹86,000.

Moving into profit

  1. For profit to be positive, we need R(x)>C(x)R(x) > C(x):

43x>26,000+30x43x > 26{,}000 + 30x

13x>26,00013x > 26{,}000

x>2,000x > 2{,}000 …

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