(i) Revenue function R(x) = p.x. = lQx
(ii) Cost function C(x) = ax + b
(iii) Profit function p(x) = Rx – C(x) = 8x – [3.50x + 6500]
(iv) Break even point at BEP ⇒ TR = TC ⇒ R(x) = R(x) ⇒ P(x) = 0
∴ 4.50x – 6500 = 0 ⇒ x = 6500/4.500 = 1445. units
Break even point revenue is RS = 1445 × 10 = Rs. 14450