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