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2.2.1 Determine the total cost function TC(Q).

Computer Science

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2.2.1 Determine the total cost function TC(Q)TC(Q).

The total cost consists of a fixed cost and a variable cost.
Fixed cost (FC) = R30.
Variable cost per unit = R3.
For QQ units, the total variable cost (VC) is 3Q3Q.
The total cost function TC(Q)TC(Q) is the sum of fixed cost and total variable cost.

TC(Q)=FC+VC(Q)TC(Q) = FC + VC(Q) TC(Q)=30+3QTC(Q) = 30 + 3Q

The total cost function is TC(Q)=3Q+30\boxed{TC(Q) = 3Q + 30}.

2.2.2 Explain the value of cc in the profit function.

The profit function is given as π(Q)=aQ2+bQ+c\pi(Q) = aQ^2 + bQ + c.
Profit is defined as Total Revenue minus Total Cost: π(Q)=TR(Q)−TC(Q)\pi(Q) = TR(Q) - TC(Q).
When the quantity produced Q=0Q = 0, there is no revenue, so TR(0)=0TR(0) = 0.
However, the fixed cost of R30 is still incurred, so TC(0)=30TC(0) = 30.
Therefore, the profit at Q=0Q=0 is π(0)=TR(0)−TC(0)=0−30=−30\pi(0) = TR(0) - TC(0) = 0 - 30 = -30.
From the profit function, π(0)=a(0)2+b(0)+c=c\pi(0) = a(0)^2 + b(0) + c = c.
Thus, c=−30c = -30.
The value of cc represents the fixed cost incurred as a loss when no units are produced (Q=0Q=0).

2.2.3 Given that π(2)=−8\pi(2) = -8 and π(8)=16\pi(8) = 16, determine aa and bb.

From 2.2.2, we know c=−30c = -30. So the profit function is π(Q)=aQ2+bQ−30\pi(Q) = aQ^2 + bQ - 30.
Using the given information:

  1. For π(2)=−8\pi(2) = -8: a(2)2+b(2)−30=−8a(2)^2 + b(2) - 30 = -8 4a+2b−30=−84a + 2b - 30 = -8 4a+2b=224a + 2b = 22 Dividing by 2, we get: 2a+b=11(Equation 1)2a + b = 11 \quad (Equation \ 1)
  2. For π(8)=16\pi(8) = 16: a(8)2+b(8)−30=16a(8)^2 + b(8) - 30 = 16 64a+8b−30=1664a + 8b - 30 = 16 64a+8b=46(Equation 2)64a + 8b = 46 \quad (Equation \ 2)

From Equation 1, express bb in terms of aa:

b=11−2ab = 11 - 2a

Substitute this into Equation 2:

64a+8(11−2a)=4664a + 8(11 - 2a) = 46 64a+88−16a=4664a + 88 - 16a = 46 48a=46−8848a = 46 - 88 48a=−4248a = -42 a=−4248a = \frac{-42}{48} a=−78a = -\frac{7}{8}

Now substitute the value of aa back into the expression for bb:

b=11−2(−78)b = 11 - 2\left(-\frac{7}{8}\right) b=11+148b = 11 + \frac{14}{8} b=11+74b = 11 + \frac{7}{4} b=444+74b = \frac{44}{4} + \frac{7}{4} b=514b = \frac{51}{4}

The values are a=−78 and b=514\boxed{a = -\frac{7}{8} \text{ and } b = \frac{51}{4}}.

2.2.4 Determine the break-even point(s).

Break-even points occur when profit π(Q)=0\pi(Q) = 0.
Using the profit function with a=−78a = -\frac{7}{8}, b=514b = \frac{51}{4}, and c=−30c = -30:

π(Q)=−78Q2+514Q−30\pi(Q) = -\frac{7}{8}Q^2 + \frac{51}{4}Q - 30

Set π(Q)=0\pi(Q) = 0:

−78Q2+514Q−30=0-\frac{7}{8}Q^2 + \frac{51}{4}Q - 30 = 0

Multiply the entire equation by 8 to eliminate fractions:

−7Q2+102Q−240=0-7Q^2 + 102Q - 240 = 0

Multiply by -1 to make the leading coefficient positive:

7Q2−102Q+240=07Q^2 - 102Q + 240 = 0

Use the quadratic formula Q=−B±B2−4AC2AQ = \frac{-B \pm \sqrt{B^2 - 4AC}}{2A}:
Here, A=7A=7, B=−102B=-102, C=240C=240.

Q=−(−102)±(−102)2−4(7)(240)2(7)Q = \frac{-(-102) \pm \sqrt{(-102)^2 - 4(7)(240)}}{2(7)}
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