Question

Suppose the cost function associated with a product is C(x) = cx + F dollars and the revenue is R(x) = sx, where c denotes the unit cost of production, s denotes the unit selling price, F denotes the fixed cost incurred by the firm, and x denotes the level of production and sales.

(a) Find the break-even quantity in terms of constants c, s, and F.


(b) Find the break-even revenue in terms of constants c, s, and F. (Hint: Substitute into R(x).)