Suppose Katie’s Kookies has a monopoly market and the daily cost of making her cookies is

𝐶(𝑥) = 7 + 5.63𝑥 + 0.001𝑥 2 , where 𝑥 is the number of dozens of cookies.

a) If the daily revenue is 𝑅(𝑥) = 6𝑥. Determine the break-even point.

b) And the demand equation is 𝑝 = 7.39 − .0015𝑥, where 𝑝 is price per dozen of cookies. Determine the break-
even point.
c) Using the demand equation 𝑝 = 7.39 − .0015𝑥. How many dozens of cookies should Katie cook to maximize
revenue? Profit?

Break-Even Points with quadratic functions.

If the cost, 𝐶(𝑥), or revenue, 𝑅(𝑥), functions are quadratic, does the process to find the break-even point change?

Suppose Katie’s Kookies has a monopoly market and the daily cost of making her cookies is

𝐶(𝑥) = 7 + 5.63𝑥 + 0.001𝑥 2 , where 𝑥 is the number of dozens of cookies.

a) If the daily revenue is 𝑅(𝑥) = 6𝑥. Determine the break-even points.

https://www.desmos.com/calculator/glhyfq5ybm
Revenue:

Revenue is ______________ times_________________.

In a monopoly market, one in which the companies product is the only choice, the selling price will decide how many
units they sell. This relationship is described by the demand function!

(Don’t forget the demand function gives the relationship between the _______________ and the

_______________________.)

For example, if the demand for Katie’s Kookies increases, then Katie will _____________ the price. If the

demand for cookies decreases, then Katie will _______________ the price.

If demand is _____________, then revenue is R(x)=_________________=_________________.

Suppose Katie’s Kookies has a monopoly market and the daily cost of making her cookies is

𝐶(𝑥) = 7 + 5.63𝑥 + 0.001𝑥 2 , where 𝑥 is the number of dozens of cookies.

b) And the demand equation is 𝑝 = 7.39 − 0.0015𝑥, where 𝑝 is price per dozen of cookies. Determine the revenue
equation and the break-even point.
https://www.desmos.com/calculator/ecpksxab2z

Example 2b:

The total cost for a company is given by 𝐶(𝑥) = 𝑥 2 + 160𝑥 + 6000 and the demand function is given by 𝑝 = 500 − 𝑥,
what are the break-even points?

Where on the graph is the maximum revenue? What is this point called in reference to a parabola?
Suppose Katie’s Kookies has a monopoly market and the daily cost of making her cookies is

𝐶(𝑥) = 7 + 5.63𝑥 + 0.001𝑥 2 , where 𝑥 is the number of dozens of cookies.

c) Using the demand equation 𝑝 = 7.39 − 0.0015𝑥. How many dozens of cookies should Katie cook to maximize
revenue and what is the cost at this point?

Profit?
https://www.desmos.com/calculator/7osdwb6f4x

Example 2c:

The total cost for a company is given by 𝐶(𝑥) = 𝑥 2 + 160𝑥 + 6000 and the demand function is given by 𝑝 = 500 − 𝑥,
what is the maximum revenue and the associated cost? What is the maximum profit?
Practice:

1) Suppose the total costs for a product are given by 𝐶(𝑥) = 0.6𝑥 2 + 75𝑥 + 5000 and the demand function is
given by 𝑝 = 300 − .4𝑥.
a. Find the break-even quantities.

b. Find the maximum revenue and profit.

2) Given that the total profit 𝑃(𝑥) = −2𝑥 2 + 590𝑥 − 13500, find the level of production that maximizes profit
and the maximum profit.

3) A company has fixed costs of $3,500 for its product and variable costs of 0.5𝑥 + 165, per unit where 𝑥 is the
number of units. The selling price of the product is given by 300 − 0.5𝑥 dollars per unit.
a. Determine the cost, revenue and profit equations.

b. Determine the break-even points.

c. Determine the maximum profit.