So the problem is the following:
The price of a pizza is 18. Your pizza place has fixed costs of 10000 and a cost of a pizza is 14.
a) How many pizzas do you need to sell to break-even?
b) How many pizzas do you need to sell for a profit of 2000?
Apparently this is how you resolve a) :
P*Q=FC+AVC*Q
18Q=10000*14Q
Q=2500
My question here is, how do we get Q=2500?
And b) :
Profit=P*Q-(FC+AVC*Q)
2000=18Q-(10000+14Q)
Q=3000
Same question how do we get Q=3000?
Your help would be very much appreciated!
The price of a pizza is 18. Your pizza place has fixed costs of 10000 and a cost of a pizza is 14.
a) How many pizzas do you need to sell to break-even?
b) How many pizzas do you need to sell for a profit of 2000?
Apparently this is how you resolve a) :
P*Q=FC+AVC*Q
18Q=10000*14Q
Q=2500
My question here is, how do we get Q=2500?
And b) :
Profit=P*Q-(FC+AVC*Q)
2000=18Q-(10000+14Q)
Q=3000
Same question how do we get Q=3000?
Your help would be very much appreciated!