Question

A food cooperative is a business that usually offers special prices on locally grown food and produce. Some are clubs and some are retail stores. A club costs a one time club fee of $20 and a cost of $15 per week. A retail store costs no club fee and a cost of $17.50 per week. After how many weeks will the cost of the club and the retail be the same?

Answer 1

The indifference point is 8 weeks.

Explanation:

First, we establish the total cost formula for each:

x= number of weeks

Club:

Total cost= 20 + 15*x

Retail:

Total cost= 17.5*x

Now, we equal both formulas and isolate x:

20 + 15x = 17.5x

20 = 2.5x

8=x

The indifference point is 8 weeks.

Prove:

Total cost= 20 + 15*8= $140

Total cost= 17.5*8= $140