CEE 5110 Lecture Notes - Lecture 2: Opportunity Cost, Sunk Costs, Fixed Cost
1 Apr 2016
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Refer to section 2. 2. 5: solving, the optimal demand is (eq. 2-6: we can also find the maximum profit . Ct = cf + cv but by assumption total cv = cv. d: acme manufacturing is a major player in the lawn sprinkler business. Their high- end sprinkler is used commercially, and is quite popular with golf course greens keepers. In producing these sprinklers acme"s fixed cost (cf) is ,000 per month with a variable cost (cv) of . 50 per unit. The selling price for these high-end sprinklers is described by the equation p=. 50 0. 02(d): and we can find revenue/cost breakeven. For discrete functions, calculate cost over a range of values of the design variable: solve the equation in step 3 for a continuous function. For discrete, the optimum value has the minimum cost value found in step 3: simplified cost function.
