Question

3. The sales director a manufacturer decides to try out two different methods of distributing and seling a new video game. The game is sold to a retailer for a net profit of $9.90 on each game . The game is also sold at the factory outlet for a net profit of $10.99 on each game. If 500 games are sold by the outlet, many more would have to be sold by the retailer in order for the profit to be about equal

Answer 1

The number of games that need to be sold to the retailer in order for the profit to be about equal is approximately 555 games

Explanation:

The given parameters are;

The net profit at which each game is sold to a retailer = $9.90

The net profit at which each game is sold at the factory outlet = $10.99

The number of units sold by the outlet = 500

The amount in profit from selling at the factory outlet = 500 × $10.99 = $5,495.00

The number of games that need to be sold to the retailer in order for the profit to be about equal is given as follows;

Let "x" represent the number of games that need to be sold to the retailer in order for the profit to be about equal

Therefore, we have;

x × $9.90/game = $5,495.00

x = $5,495.00/($9.90/game) = 555.
`\overline {05}` games ≈ 555 games

Therefore, the number of games that need to be sold to the retailer in order for the profit to be about equal = x ≈ 555 games.