# An employer pays \$3,000 per month for renting office space

September 29, 2018

An employer pays \$3,000 per month for renting office
space, and pays a total of 12 employees (including yourself) \$1,000 per month
(each) plus a bonus of \$10 for each unit of work completed by that employee
that month.
Suppose also that your employer makes \$18
(gross) per unit of work done by an employee. Use Profit = Revenue – Cost (P =
R – C)[Total points: 16]
1. Suppose you complete 200 units this month.
How much will you be paid? [1 pt]
2. Suppose all of your co-workers (on average)
also complete 200 units this month. Find your boss’ profits. [1 pt]
3. Repeat 1 and 2 with an average of 300 units
this month. [2 pt]
4. Find your monthly pay S in terms of x, the
number of units of work you complete that month. [1 pt]
5. If all of your co-workers produce/sell (on
average) x units per month, find the monthly profit P of your employer in terms
of x. [1 pt]
Graph this equation [1 pt]* , and use the graph
and the equation to determine how productive your employees have to be for your
boss to:
(a) break even [1 pt];
(b) make \$1,000 per month [1 pt];
(c) make \$5,000 per month [1 pt];
In addition find the y-intercept and use that as
one of your points.
What is the meaning of the x-intercept [1 pt]
and the y-intercept [1 pt] (In this problem, the y-axis represents P (profit))?
6. Due to the revenue from the units of work you
completed, your employer is now able to rent a bigger office (\$10,000 per
month), and employ 50 employees (at the same wages). Find your boss’ profits P
in terms of x [1 pt] (Do not graph) and answer parts a, b, and c from above [3
pt].
*Make x-axis x, # ***** units and make it into
25, 50, 75, 100, etc units.
Make y-axis P for profit and the divisions
\$1000, \$2000, \$3000, etc. Be sure to show negative values for profit but not
for # ***** units

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