Problema Solution
You invest in a new play . the cost includes an overhead of 36,250 plus production costs of 2500 per performance . A sold out performance brings in 3125 . Write the cost function C . Write the revenue function R , Determine the breakpoint
Answer provided by our tutors
The "Cost" is how much money it takes to make a given number of performance.
Let p represent the number of performances:
c = 36,250 + 2,500p
The "Revenue" is the amount of money the company takes in due to making the performances:
r = 3,125p.
The break even point (breakpoint), in any business, is where your revenue (income) is just enough to pay your costs (expenses).
This means c = r.
Thus,
36,250 + 2,500p = 3,125p
by solving for p we find:
p = 58 performances
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The break even point (breakpoint) is 58 performances.