A small plant manufactures riding lawn mowers. The plant has a net fixed cost (leases, insurance, and so on) of $56000/day and variable costs (labor, materials, and so on) of $1600 per unit produced. The mowers are sold for $2000 each unit per day. Write down the appropriate cost and revenue equations for the problem respectively. Using these equations, answer the following questions: (a) How many units must be manufactured and sold each day for the company to maintain break-even trade? (b) Plot both equations simultaneously in a graph, and clearly indicate break-even point, equilibrium point and equilibrium price in this trade to maintain revenue as expected. Interpret the significance of the regions to the left- and right-side of the break-even point in this business.
Equations and Inequations
Equations and inequalities describe the relationship between two mathematical expressions.
Linear Functions
A linear function can just be a constant, or it can be the constant multiplied with the variable like x or y. If the variables are of the form, x2, x1/2 or y2 it is not linear. The exponent over the variables should always be 1.
A small plant manufactures riding lawn mowers. The plant has a net fixed cost (leases, insurance, and so on) of
$56000/day and variable costs (labor, materials, and so on) of $1600 per unit produced. The mowers are sold for $2000
each unit per day. Write down the appropriate cost and revenue equations for the problem respectively. Using these
equations, answer the following questions:
(a) How many units must be manufactured and sold each day for the company to maintain break-even trade?
(b) Plot both equations simultaneously in a graph, and clearly indicate break-even point, equilibrium point and
equilibrium price in this trade to maintain revenue as expected. Interpret the significance of the regions to the left- and
right-side of the break-even point in this business.
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