a bicycle store costs $3600 per month to operate. The store pays an average of $60 per bike. the ave

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  1. math_celebrity

    math_celebrity Administrator Staff Member

    a bicycle store costs $3600 per month to operate. The store pays an average of $60 per bike. the average selling price of each bicycle is $100. how many bicycles must the store sell each month to break even?

    Cost function C(b) where b is the number of bikes:
    C(b) = Variable Cost + Fixed Cost
    C(b) = Cost per bike * b + operating cost
    C(b) = 60b + 3600

    Revenue function R(b) where b is the number of bikes:
    R(b) = Sale price * b
    R(b) = 100b

    Break Even is when Cost equals Revenue, so we set C(b) = R(b):
    60b + 3600 = 100b

    To solve this equation for b, we type it in our math engine and we get:
    b = 90
     

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