Question

A producer knows that she can sell as many items at $0.25 each as she can produce in a day. If her cost is C=$0.20x+$70, find her break even point

B) if the producer can change her cost equation to C(x) =$0.15x+$150 by hiring an assistant, should she make the change. Explain

Answer 1

Answerrr plsss

Answer 2

still need help?

Answer 3

The formula for Break-even point is cost=sales (C=S).
I know the answer to the first part, i just need help with part B

Answer 4

Okay thankyou soo much it really helped. One more thing does the sales remain the same i.e. $0.25?

Answer 5

Alright, so for the second part the equation is $0.15x+$150
So basically if we compare this to the first equation (without the assistant) we can see a few things. In this new equation the slope is less (which is a good thing, because it says that the cost per item is less) but the y-intercept is more (which is a bad thing, because the starting cost is a lot higher). So what we can say is that well for part a we got 1400 items and if we find the break point of the second ($0.15x+$150) function is at 1500 items . So basically a disadvantage of the second function is that it takes longer to get to the break point (selling 1500 items instead of 1400), but after that point is reached, the second function (with the assistant) is more advantageous because the Sales minus cost is higher, bringing more profit. All in all, if the producer is to hire an assistant, then it is only worth it if she can sell more than 1500 items (actually a bit more, because with the second function, selling 1500 items would bring the produces no profit, unlike the first one, which would still bring some in (at 1500 items)), so actually the second function becomes more advantageous at 1600 items because that is when both cost functions cross.

Answer 6

sorry, i changed the 3rd to last word to cross, that is correct. And yeah the sales function remains the same

Answer 7

Okay.. Great work