Question

Antony works at a local clothing store. He can earn either $600 per month plus a %5 commission or $450 per month and a %7 commission. Write and solve a system of equations that you could use to determine the amount of merchandise that Antony would need to sell in order to earn the same amount of money for each pay scale.

Answer 1

The indifference point is $7,500 in sales.

Explanation:

Giving the following information:

He can earn either $600 per month plus a %5 commission or $450 per month and a %7 commission.

First, we need to structure the total income formula:

Total income 1= 600 + 0.05x

Total income 2= 450 + 0.07x

x= sales

Now, we need to equal both equations and isolate x:

600 + 0.05x = 450 + 0.07x

150= 0.02x

150/0.02= x

x= $7,500

The indifference point is $7,500 in sales.