Cost, Revenue and Profit Functions
This section introduces the fundamental concepts of cost, revenue, and profit functions in business economics. It provides a practical example of calculating these functions for a manufacturing company.
The problem presents a third-degree polynomial cost function Kx = ax³ + bx² + cx + d, where x represents the production quantity. Fixed costs are given as 24 GE monetaryunits, and revenue per unit is 22 GE. The task involves calculating various aspects of this business scenario.
Vocabulary: GE Geldeinheit - Monetary unit, ME Mengeneinheit - Quantity unit
Example: 1 GE = 1,000 EUR, 1 ME = 1,000 pieces
The problem is broken down into several steps, including:
a) Calculating the total cost function
b) Determining the revenue function
c) Graphing the cost and revenue functions
d) Deriving the profit function
e) Calculating break-even points
f) Graphing the profit function
g) Estimating the maximum profit
h) Determining the variable unit cost function
Highlight: This comprehensive problem covers all major aspects of cost, revenue, and profit analysis, providing a practical application of these concepts.