A medical devices firm is considering a new product The acco

A medical devices firm is considering a new product. The accounting department estimates that the total cost,
C(x), of producing x units will beC(x) = 75x + 5620.
The sales department estimates that the revenue, R(x), from selling x units will be R(x) = 85x,
but that no more than 897 units can be sold at that price. Find and interpret (R - C)(897).

a. $1459 profit, income exceeds cost
It is worth it to develop product.
b. $149,140 profit, income exceeds cost
It is worth it to develop product.
c. -$3350 loss, cost exceeds income
It is not worth it to develop product.
d. $3350 profit, income exceeds cost
It is worth it to develop product.

Solution

R(x) = 85x

C(x) = 75x + 5620

Find (R-C)(897)

(R-C)(897) = 85x - (75x + 5620)

(R-C)(897) = 85(897) - (75(897) +5620) PLease note x is 897

(R-C)(897) = 76245 - (67275 +5620)

(R-C)(897) = $3350

2. This tells us the profit of producing 897units for this firm will be $3350 Revenue - Cost = Profit)