A small plant manufactures riding lawn mowers. The plant has fixed cost (leases, insurance, etc.) of $48,000 per day and variable cost (labor, materials, etc.) of $1,400 per unit produced. The mowers are sold for $1,800 each. So the cost and revenue equations are

Question

y= 48,000 + 1,400x
y= 1,800x

Answer 1

cost= 4800 + 1400x

Answer 2

x= 120

Answer 3

The break-even point is the point where cost = revenue
1800x= 48000+1400x
X= 120
The equilibrium quantity is 120 mowers