Problema Solution
An aluminum company uses a specialized process to produce brackets for the automotive industry. The company’s profit function in millions of dollars for x million brackets is P = 0.7x – 24.5 and their cost function is C = 0.9x + 24.5. Find the breakeven point in millions of units.
Answer provided by our tutors
The break-even point is the point where revenue equals cost, or equivalently profit = 0 thus we have
P(x) = 0
0.7x – 24.5 = 0
x = 24.5/0.7
x = 35 millions of brackets
the break even point in sales units (brackets) is 35 millions of sales units that is brackets.