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Field: Economics: Q B M C (Q) '

This document defines key economic concepts including cost, revenue, profit, and depreciation functions. It provides the formulas for linear cost as C(q)=mq+b, revenue as R(q)=pq, and profit as P(q)=R(q)-C(q). An example calculates the break-even point where revenue and cost intersect. Depreciation is defined with the formula V(t)=mt+b, showing the linear decrease in value over time.

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Seth Eldrick Anzures
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33 views4 pages

Field: Economics: Q B M C (Q) '

This document defines key economic concepts including cost, revenue, profit, and depreciation functions. It provides the formulas for linear cost as C(q)=mq+b, revenue as R(q)=pq, and profit as P(q)=R(q)-C(q). An example calculates the break-even point where revenue and cost intersect. Depreciation is defined with the formula V(t)=mt+b, showing the linear decrease in value over time.

Uploaded by

Seth Eldrick Anzures
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Field: Economics

Cost
C(q) = mq + b - The cost of manufacturing a quantity of q of some good (linear). Its domain is all real
numbers and its range is also all real numbers
q−b
Inverse: =C (q) '
m
C(q) – cost for manufacturing q quantity (Dependent)
m – variable costs per unit (Independent)
q – number of units (Independent)
b – fixed costs (Constant)

C(q) = mq + b if m = 3 and b = 5
Revenue
R(q) = pq – The total revenue from a sale of a product (linear). The domain is all real numbers, and the
range is also all real numbers
q
Inverse: =R (q)'
p
R(q) – revenue (Dependent)
p – unit price (Independent)
q – quantity sold (Independent)

R(q) = pq if p = 5
Profit = The difference of revenue and cost
P(q) = R(q) – C(q)
P – profit
R – revenue
C – cost
The break-even point is the point where profit is zero or R(q) = C(q)
R(q) = 12q
C(q) = 10q + 6

Black – C(q)
Red – R(q)
To find the intersection, set C(q) = R(q)
12q = 10q + 6
12q – 10q = 6
2q = 6
q=3

Plug-in q to either function


12(3) = 36
10(3) + 6 = 36

The break-even point is at 3 units and 36$ (3, 36)\

Depreciation – The rate where the value of a product decreases (linear), Its domain is all real numbers,
and its range is also all real numbers.
V(t) = mt + b
V(t) – depreciation rate (dependent)
m – depreciation constant (constant)
t – number of years (independent)
b – original price (constant)

t−b
Inverse: =V (t )
m

V(t) = mt + b when m = -5 and b = 3

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