You wanted to join a booth fair, and you are aiming to get a profit that is twice as your capital. Using the given information, your sample plan may be as follows:
Product Organic skincare products for women
Description An organic skincare cream and soap that brightens
and moisturizes your skin.
Goal To provide anti-aging skin for women and
maintaining their skin body.
Capital 15000
Fixed Cost 7000
Variable Cost 8000
Profit function 300(a) = 450a - 150a
To prove that the profit function will yield twice the capital.
This profit function: 300(y) = 450y - 150y will help achieve twice profit as your capital.
Profit function = revenue function r(y) - cost function c(y)
300(y) = 450y - 150y
where;
- y = no of units produced and sold.
- p = profit sold per unit
Cost function C(y) = fixed cost + (variable cost) × (amount of unit sold)
Assumption:
Cost function C(y) = 7000 + (80 × 100)
Cost function C(y) = 7000 + 8000
Cost function C(y) = 15000
Revenue function R(y) = price per revenue sold × no of sold units
R(y) = 450 × 100
R(y) = 45000
∴
Profit function = 45000 - 15000
Profit function = 30000
Therefore, can conclude that the profit function is revenue function r(y) - cost function c(y).
Hence the formula:
Profit function = revenue function r(y) - cost function c(y) (Proved)
Learn more about Profit function here:
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is the desired margin of error.