The equation for the total revenue earned by a company for selling widgets is p=3q. The equation for the total cost of the company for producing widgets is p=q+4.
Identify the break-even quantity.
break-even is where revenue = costs, so
3q = q+4
q=2
Minding my p's and q's, I would say:
if p = 3q
in p = q+4
3q = q+4
2q = 4
q = 2
then p = 6
4^-1.5
To identify the break-even quantity, we need to find the value of 'q' where the total revenue (p) equals the total cost.
Given:
Total Revenue (p) = 3q
Total Cost (p) = q + 4
In order to find the break-even quantity, we need to set the equation for the total revenue equal to the equation for the total cost:
3q = q + 4
Now, we can solve this equation to find the value of 'q' that satisfies the break-even condition:
3q - q = 4
2q = 4
q = 2
Therefore, the break-even quantity is 2.