A company that manufactures radios has determined that

Question

Quantitative modelling

A company that manufactures radios has determined that retailers are likely to purchase x radios at a price of p(x) = 10 - x/1000 rand per unit. If the company's fixed costs are R5 000 and their variable cost is R2 per unit, determine the company's profit function:

[1] profit(x) = 10 - x/1000

[2] profit(x) = 10 - x/1000 - 5000 + 2x

[3] profit(x) = - x²/1000 + 8x - 5000

[4] profit(x) = 10 000 - x

[5] None of the above.