What characteristic of the cost function is revealed by the y-intercept of the cost function? Explain
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What characteristic of the cost function is revealed by the y-intercept of the cost function?
• Explain why there are two break-even points.
• Specify the production levels where the company loses money and where it is profitable.
• If the vertex of a quadratic function
y = f(x) = ax 2 +bx+c always occurs at the point (-b/2a, f(-b/2a)),
Compute maximum profit. Does it occur at the same production level as maximum revenue?
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