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March 28, 2017

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A manufacturer can produce 8,500 units for a total profit of 47,600.00 dollars, but if he increases his production to 11,500 units, then his profit becomes $65,600.00.

It follows that his fixed cost is? and his net profit per unit produced is?

  • Math - ,

    Treat your information as 2 ordered pairs of the form
    (x,p) where x is the number of units, and p is the profit.
    So you have (8500, 47600) and (11500, 65600)
    slope = (65600-47600)/(11500-8500) = 6

    so your equation in the form y = mx + b is
    p = 6x + b
    sub in the first point
    47600 = 6(8500) + b
    b = -3400

    p = 6x - 3400

    Can you interpret this equation?
    e.g. What is his "profit" if he makes zero units ?

  • Math - ,

    I got that far. But I still do not know how to find the fixed cost and net profit from the p(x) equation.

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