A newsstand spends [tex]$\$[/tex] 600[tex]$ a month on rent and electricity, and it spends $[/tex]\[tex]$ 2$[/tex] for each magazine that it sells. The newsstand charges [tex]$\$[/tex] 5[tex]$ for each magazine. If $[/tex]n$ is the number of magazines, which equation represents the profit function of the newsstand?

A. [tex]p = 600n + 3[/tex]
B. [tex]p = 2n + 600[/tex]
C. [tex]p = 5n - 600[/tex]
D. [tex]p = 3n - 600[/tex]



Answer :

To determine which equation represents the profit function of the newsstand, let's break down the problem step-by-step.

1. Fixed Costs:
The newsstand spends a fixed amount of \[tex]$600 a month on rent and electricity. This amount does not change regardless of how many magazines are sold. Therefore, the fixed cost is \$[/tex]600.

2. Variable Costs:
The cost of each magazine is \[tex]$2. If the newsstand sells \( n \) magazines, the total variable cost will be \$[/tex]2 multiplied by the number of magazines sold, i.e., \[tex]$2n. 3. Revenue: The newsstand charges \$[/tex]5 for each magazine sold. Therefore, the revenue generated from selling [tex]\( n \)[/tex] magazines is \[tex]$5 multiplied by \( n \), i.e., \$[/tex]5n.

4. Profit Calculation:
Profit is calculated by subtracting the total costs (both fixed and variable) from the total revenue. Therefore, we need to derive the profit function using the following formula:
[tex]\[ \text{Profit} = \text{Revenue} - \text{Total Costs} \][/tex]

5. Calculating the Profit:
- Total revenue from selling [tex]\( n \)[/tex] magazines: \[tex]$5n - Total variable cost from purchasing \( n \) magazines: \$[/tex]2n
- Total fixed cost: \[tex]$600 - Hence, the total costs (fixed + variable) are: \$[/tex]600 + \$2n

Therefore, the profit function [tex]\( p \)[/tex] can be written as:
[tex]\[ p = 5n - (600 + 2n) \][/tex]

6. Simplifying the Profit Function:
Simplify the expression:
[tex]\[ p = 5n - 600 - 2n \][/tex]
Combine the like terms:
[tex]\[ p = (5n - 2n) - 600 \][/tex]
[tex]\[ p = 3n - 600 \][/tex]

So, the equation that represents the profit function of the newsstand is:
[tex]\[ p = 3n - 600 \][/tex]

Therefore, the correct answer is:
[tex]\[ \boxed{D} p = 3n - 600 \][/tex]