Write a Cost Function for the Problem

question 17

Multiple Choice

Write a cost function for the problem. Assume that the relationship is linear.
-A cable TV company charges $21 for the basic service plus $7 for each movie channel. Let C(x) be the total cost in dollars of subscribing to cable TV, using x movie channels.

• A)C(x)= 7x + 21
• B)C(x)= 21x + 7
• C)C(x)= 21x - 7
• D)C(x)= 7x - 21

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Definitions:

Sales Increase

The rise in the amount of products or services sold by a company, usually compared to a previous period.

Contribution Margin

The amount by which sales revenue exceeds variable costs, representing the contribution towards covering fixed costs and generating profit.

Direct Material Costs

The expenditures for materials that are directly involved in the manufacturing process of a product.

Fixed Costs

Operating expenses that remain constant regardless of the business activity level, such as insurance or lease payments.