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About
Anne Julianne
Andrei Bailador
Members Jumangit

Objectives

John Harry Carl Aaron

Galleta Layug
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About Objectives:
At the end of the lesson, the student should be able to:
Members
1. Calculate the relationships of revenue, cost, and profit functions;
Objectives 2. Follow the steps in computing the relationships of cost, revenue
and profit functions in decision making; and
3. Solve problems about the relationship of revenue, cost and profit
functions.
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Intro What's on your mind, Group 4?

Managerial Economics
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Different type of Cost:

Variable Cost -  a cost that varies with the

output (the number of units produced)
Fixed Cost - a cost that is incurred whether
products or services are produced or not. 
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Revenue Function
R = PQ
Wherein: Like Comment Share
Price = $1.50
< Revenue Function: >
R = $1.50Q
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Cost Function
C= F + V(Q)
Wherein: Like Comment Share
Fixed Cost = $40,000
< Variable Cost = $0.30 >
Cost Function:
C = $40,000 + $0.30Q
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Profit Function
π = (P – V)Q - F
Wherein: Like Comment Share
Price = $1.50
< Variable Cost = $0.30 >
Fixed Cost = $40,000

Profit Function:
π = ($1.50 - $0.30)Q - $40,000
π = $1.20Q- $40,000
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Revenue, Cost, & Profit
Functions
R = $1.50Q Like Comment Share
C = $40,000 + 0.3Q
< π = $1.20Q - $40,000 >
 Revenue, Cost, & Profit
Functions Table
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Units Cost ($) Profit ($)
($)
0 0 40,000 -40,000
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10,000 15,000 43,000 -28,000

< 20,000 30,000 46,000 -16,000 >

30,000 45,000 49,000 -4,000
40,000 60,000 52,000 8,000
50,000 75,000 55,000 20,000
60,000 90,000 58,000 32,000
 Revenue, Cost, & Profit 1
Functions Table
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Units Cost ($) Profit ($)
($)
0 0 40,000 -40,000
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10,000 15,000 43,000 -28,000

< 20,000 30,000 46,000 -16,000 >

30,000 45,000 49,000 -4,000
40,000 60,000 52,000 8,000
50,000 75,000 55,000 20,000
60,000 90,000 58,000 32,000

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Revenue, Cost, & Profit function Line Graph.

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Average Cost Function

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Andrei Bailador

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Units Revenue Cost Profit Average
Cost
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0 0 5,000 -5,000 0
Memories 50 4,750 7,000 -2,250 140

Saved 75 7,125 8,000 -875 106.67

100 9,500 9,000 500 90
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125 11,875 10,000 1,875 80
Pages 150 14,250 11,000 3,250 73.33
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