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Average Profit: The estimate revenue and cost functions for the development of a new product are given by R(x)= -2x^2 + 8x and C(x)= 3x + 2, where x is the number of items in thousands.

 

a) Determine the break-even point for production.

 

b) The average profit function is AP(x)= P(x)/x. What production levels are required for AP(x) > 0?

 Feb 20, 2021

2+0 Answers

 #1
avatar+129907 
+3

Here's    (a)

 

-2x^2   + 8x   =   3x  +  2          rearrange  as

 

2x^2  - 5x  + 2  =  0

 

(2x  - 1)  ( x - 2)    = 0

 

Two  break-even  pts

 

2x   - 1  =   0                                                 x  -  2 =  0

2x =   1                                                          x =  2  ( thousand) = 2000 items

x = 1/2 (thousand)  = 500 items

 

 

cool cool cool          

 Feb 20, 2021
 #2
avatar+33 
0

Thank you very much for solving it!

Could you help me with b)? 

freshman  Feb 20, 2021

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