00:01
So here we're talking about profits and break -even.
00:03
So for the first one, a, we need to construct a profit function and set it equal to zero, because that's the definition of break -even, right? when your profit is equal to zero.
00:13
Your profit is equal to your revenue, price times quantity, minus your costs.
00:19
So your break -even is we're solving for the level of q, right? that gets profit equals to zero.
00:27
So price is 10, quantity is q, our fixed costs are 70 ,000, and our variable costs are 3q.
00:37
So there's our profit.
00:38
We set it equal to zero.
00:39
We get 7q is equal to 70 ,000.
00:43
We get q is equal to 10 ,000 as the break -even.
00:50
Now we are thinking about b, profit at 15 ,000.
00:55
So if we have q equals to 15 ,000, we use the profit function we just established...