Given the Cost Function, C(x), and the Revenue Function, R(x)

question 27

Multiple Choice

Given the cost function, C(x) , and the revenue function, R(x) , find the number of units x that must be sold to break even.
-A vendor sells hot dogs, bags of potato chips, and soft drinks. A customer buys 3 hot dogs, 3 bags of potato chips, and 3 soft drinks for $11.25. The price of a hot dog is $1.25 more than the price of a bag of potato chips.
The cost of a soft drink is $2.00 less than the price of two hot dogs. Find the cost of each item.

• A) $2.00 for a hot dog; $0.75 for a bag of potato chips; $1.50 for a soft drink
• B) $1.75 for a hot dog; $1.50 for a bag of potato chips; $0.50 for a soft drink
• C) $0.50 for a hot dog; $1.75 for a bag of potato chips; $1.50 for a soft drink
• D) $1.75 for a hot dog; $0.50 for a bag of potato chips; $1.50 for a soft drink

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Definitions:

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Average Costs

The total cost of production divided by the number of goods produced, reflecting the average expense per unit.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production.

Shut Down

The process of ceasing operations, typically referring to temporarily or permanently closing a business or facility.