Question

The table below shows possible cost and revenue equations for a manufacturer of cameras.
Cost
65.16 n + 1,500
I
Cost
35.79 n + 6,700
II
Revenue
98.75 n
III
Revenue
56.95 n
IV

Which of the following pairs of equations will never break even?
a.
I and III
b.
I and IV
c.
II and III
d.
II and IV

Answer 1

Answer: b. I and IV

Reason: Set cost = revenue. For I and IV:
65.16n + 1500 = 56.95n → 1500 = −8.21n → n = −182.7 (negative).
Since n must be nonnegative and the cost per unit (65.16) > revenue per unit (56.95), cost always exceeds revenue for n ≥ 0, so they never break even.