Business and Financial Math: Cost, Revenue & Interest Formulas
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Cost, Revenue, and Break-Even
Cost = VariableCost + FixedCost Revenue = X * price Break-even condition: P(x) = 0
C(x) = 8x + 100 R(x) = 10x R(x) = C(x) Profit = Revenue - Cost
Profit Function and Example
P(x) = R(x) - C(x) = 10x - (8x + 100) = 2x - 100
Demand and Supply Equilibrium
Demand: demand as a function of unit price P: Qd = a - bP. Equilibrium when D = S.
Supply: q (# items) as a function of unit price P. Example (demand): q = -20p + 800.
Example supply: q = 10p - 100 (supply). Solve equilibrium: -20p + 800 = 10p - 100 → -30p = -900 → p = $30 (equilibrium price). Then q = -20(30) + 800 → q = 200 (equilibrium quantity).
Compound Interest and Future Value
Variables: P = present value,