Problem

A company makes pens. They sell each pen for $10.
Their revenue is represented by R=10x.
The cost to make the pens is $2 each with a one time start up cost of $6500.
Their cost is represented by C=2x+6500.
a) Find the profit, P,(P=RC) when the company sells 1000 pens.
1500
10000
1500
10000
16500

Answer

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Answer

1500 is the profit when the company sells 1000 pens.

Steps

Step 1 :The revenue of the company when selling 1000 pens is calculated by multiplying the selling price of each pen ($10) by the number of pens sold (1000). So, R=10×1000=10000.

Step 2 :The cost of producing 1000 pens is calculated by multiplying the cost of producing each pen ($2) by the number of pens produced (1000) and adding the one-time start-up cost ($6500). So, C=2×1000+6500=8500.

Step 3 :The profit is calculated by subtracting the cost from the revenue. So, P=RC=100008500=1500.

Step 4 :1500 is the profit when the company sells 1000 pens.

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