Question

Q3:

A company sells bikes for $120 each. They pay a monthly rent of $1,800 for their store and each bike costs them $60 in materials. Write the revenue and cost functions and find the break-even point by graphing.

Answer 1

Let the number of bikes = x and total money = y.

Set up two equations:

The first equation is the cost function, which would be rent plus 60 times the number of bikes:

y = 1800 + 60x

The second equation would be revenue, where total money would be equal to 120 times the number of bikes sold:

y = 120x

Now you can graph both equations by setting the equations to equal each other. The point on the graph, where the loib=ne crosses the X axis is the break even point

Graph

120x = 1800 +60x

See attached picture for the graph and you can see the break even point is 30 bikes.

You can check by replacing X with 30 to see if the equations equal each other:

1800 + 60(30) = 1800 +1800 = 3600

120(30) = 3600