Profit function : p(x) = 53 x - 12
Cost is the total cost of producing the output.
The cost function consists of two different types of costs:
- Variable costs
- Fixed costs.
Variable costs vary with output (number of units produced). Total variable costs can be
expressed as the product of variable costs per unit and the number of units produced. If there are multiple items
manufactured costs are higher.
Fixed costs usually do not vary with performance.
Revenue is the total payment received from the sale of goods or the provision of a service.
The revenue function R() reflects the revenue from selling “” quantity of output items at price
"p" after item.
() =
Profit functions
The profit function P() is the difference between the revenue function R(x) and the total cost function C()
So P() = R() – C()
=−
Now, Profit = Revenue - Cost
= 60 x - ( 12 + 7 x)
= 60 x -12 -7 x
Profit = 53 x - 12
Hence, Profit function : p(x) = 53 x - 12
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