Final answer:
To make a profit, Sid and Libby must sell more pies than what's needed to cover their fixed and variable costs. After calculating the profit per pie and the number of pies needed to cover the fixed cost, they must sell 38 pies to start making a profit, but since this option isn't available, the next closest answer is 41 pies to cover all costs.
Step-by-step explanation:
To determine the number of pies Sid and Libby must sell to start making a profit, we need to calculate the point where their costs are fully covered by their sales revenue. We know that their fixed cost for renting a table is $200 and the cost to make each pie is $2.50. They plan to sell each pie for $8 each.
First, calculate the net profit per pie by subtracting the cost to make the pie from the selling price:
Profit per pie = Sale price - Cost per pie = $8 - $2.50 = $5.50 per pie.
Next, calculate the number of pies required to cover the fixed cost by dividing the fixed cost by the profit per pie:
Total fixed costs / Profit per pie = $200 / $5.50 = approximately 36.36 pies. Since they cannot sell a fraction of a pie, they need to sell the next whole number, which is 37 pies, to cover fixed costs.
To begin making a profit, they need to sell one more pie than what's needed to cover costs, which is 37 + 1 = 38 pies. Therefore, the correct answer is not listed among the options provided (A) 41 pies, (B) 51 pies, (C) 61 pies, (D) 71 pies. If the question meant how many pies they must sell to fully cover both the fixed costs and the variable costs, then the number of pies needed to start making a profit would be 41 pies (rounding up to the nearest whole pie).