Question

Queens College is planning a golf outing at one of the local golf courses to raise money for scholarships. Queens College has two options for the golf outing:

OPTION 1: Kissena Park Golf Course
a. Fixed cost--$5,000.
b. Variable cost--$30 per golfer.
OPTION 2: Clearview Golf Course
a. Fixed cost--$4,000.
b. Variable cost--$35 per golfer.
The Green Fee (selling price) paid by each golfer in order to participate in the golf outing is expected to be $50 per golferHow many golfers will be attend the golf outing at the point of indifference?
a. 600 golfers b. 300 golfers
c. 500 golfers d. 200 golfers
e. 400 golfers

Answer 1

The point of indifference is the point at which the costs of the two options are equal. In this case, the point of indifference is 200 golfers. At this point, both options would have the same cost, and it would not matter which option Queens College chooses.

Step-by-step explanation:

The point of indifference is the point at which the costs of the two options are equal. Let's calculate the point of indifference between Option 1 and Option 2. For Option 1, the total cost is the sum of the fixed cost and the variable cost per golfer, which is $5,000 + $30x. For Option 2, the total cost is the sum of the fixed cost and the variable cost per golfer, which is $4,000 + $35x. Setting these two costs equal and solving for x, we get:

$5,000 + $30x = $4,000 + $35x

$1,000 = $5x

x = 200

Therefore, the point of indifference is 200 golfers. At this point, both options would have the same cost, and it would not matter which option Queens College chooses.