When the cost for producing a certain product is $37 each, the fixed costs are $70,000, and the selling price for each product is $72, then the cost function of this equation will be C(x) = 37x + 70,000. Therefore, the option E holds true.
A cost function can be referred to or considered as the total of the fixed costs and the variable costs per unit for a firm. The formula representation of the cost function is,
Cost function = (Variable Cost per unit x No. of Units) + Fixed Costs.
Therefore, the option E holds true and states regarding the significance of cost function.
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The missing options to the incomplete question have been added below for better reference.
The cost for producing a certain product is $37 each. The fixed costs are $70,000. The selling price for each product is $72. What is the cost function?
a. C(x) = 37x – 70,000
B. C(x) = 37x
c. C(x) = 72x + 70,000
D. C(x) = 72x – 70,000
E. C(x) = 37x + 70,000
