Question

John is considering adding balloons to the product line he sells at the shop. There will be a cost of $200.00 for leasing the necessary equipment. The cost of buying balloons and helium and paying a worker is expected to be $4.25 per unit (balloon). He expects to sell the balloons for $6.75 each. a) Write the total cost function. b) Write the variable cost function. c) Write the revenue function. d) If John sells 70 balloons, calculate: average fixed cost, variable cost, revenue, average total cost. e) Will there be a profit or loss at this level of sales? How much? f) Determine the breakeven number of balloons.