A manufacturer sells computer chips for 300 each The company

A manufacturer sells computer chips for $300 each. The company\'s fixed costs are $120,000 per and marginal costs are $120 per chip. a) Write the equations for the revenue, cost, and profit functions. Let x be the number of chips. g(x) = C(x) = P(x) = b) How many computer chips must be sold to break even? Round to the nearest chip.

Solution

Let x be no. of chips

Revenue : g(x) = 300x

Cost function : C(x) = 120,000 + 120x

Profit : P(x) = Revenue - Cost = 300x - ( 120,000 + 120x)

= 180x - 120,000

Breakeven : P(x) =0 ;

180x - 120,000 =0

x = 120,000/180 = 666.67 = 667 chips