QUANTITATIVE MODELLING (DSC1520)
OCTOBER/NOVEMBER 2018
POSSIBLE SOLUTIONS
FC = 10 000 VC = 150q
TC = VC + FC
TC = 150q + 10 000
TR = P x Q = 350q
Profit = TR - TC
=350q − (150q + 10000) = 350q − 150q – 10000
= 200q − 10000
Thus
TR = 350q TC = 150q + 10 000 Profit = 200q – 10 000
OPTION 1
At break-even: TR = TC or Profit = 0
Profit = 200q – 10 000
200q – 10 000 = 0
200q = 10 000
Q = 50
OPTION 2
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OCTOBER/NOVEMBER 2018
POSSIBLE SOLUTIONS
FC = 10 000 VC = 150q
TC = VC + FC
TC = 150q + 10 000
TR = P x Q = 350q
Profit = TR - TC
=350q − (150q + 10000) = 350q − 150q – 10000
= 200q − 10000
Thus
TR = 350q TC = 150q + 10 000 Profit = 200q – 10 000
OPTION 1
At break-even: TR = TC or Profit = 0
Profit = 200q – 10 000
200q – 10 000 = 0
200q = 10 000
Q = 50
OPTION 2
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