MATH-M 119 Lecture Notes - Lecture 3: Fixed Cost, Marginal Cost, Variable Cost
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V(t): represents value of an item as a function of time t. Example: a new bus worth ,000 in 2010 depreciates linearly to ,000 in 2030. T= # of years since 2010 (0, 100000) (20, 20,000) What are the horizontal and vertical intercepts and what do they represent? (0, 100000) = vertical value at t= 0 (25, 0) = horizontal value at y=0. Cost, revenue, and profit: p: price per item, q: quantity (# items produced) The cost function c(q) gives the total cost of producing some goods. Cost of raw materials = per widget. Revenue function r(q) gives the total revenue received from selling a quantity q of some good. If the price is a constant, then the revenue function is a linear function of q. profit function. The breakeven point is the point where the profit = 0 and the revenue = cost. breakeven point: When q changes by +1 ----> selling one more item.