Question

how to work XYZ company's cost function for the next four months is c=500,000+5Q .. what would be the company's cost if it decides to shut down operations for the next four months solutions

Answer 1

To calculate the cost of shutting down operations for the next four months, substitute the value of Q as zero in the cost function equation c = 500,000 + 5Q. The cost will be $500,000 if the company decides to shut down operations for the next four months.

Step-by-step explanation:

To calculate the cost of shutting down operations for the next four months, we need to substitute the value of Q (quantity) as zero in the cost function equation c = 500,000 + 5Q. This will give us the fixed cost component only.

So, by substituting Q as zero, the cost function becomes:

c = 500,000 + 5(0)

c = 500,000

Therefore, if the company decides to shut down operations for the next four months, the cost will be $500,000.