Question

A bicycle company is manufacturing a new bicycle and trying to decide on a price that will maximize their profit. The graph below represents profit (P), In thousands of dollars, generated by the price of each bike (x), in hundreds of dollarsAt what price will the company break even ( make $0 of profit)

Answer 1

Since the graph is a plot between Profit and price of each bike.

The Profit will be zero whenever the curve intersects the x-axis.

It is observed that the curve intersects the x-axis twice.

So the company will have break-even at two different price of the bike.

The first break even occurs at x=2 and the other break even occurs at x=10.

Therefore, the company reaches break even when the price of each bike is either $200, or $1000