SOLUTION: Jane’s Seafood Diner serves 200 meals a day at an average price of $20. The variable cost of each meal is $10, and the fixed costs of running the restaurant are $1,750 a day. (I

Question 1209494: Jane’s Seafood Diner serves 200 meals a day at an average price of $20. The variable cost of each meal is $10, and the fixed costs of running the restaurant are $1,750 a day.
(I) What profit does the restaurant make?
(ii) What is the average cost of a meal?
(iii) By how much would the average cost of a meal fall if the number of meals served rose to
250 a day

Answer by ikleyn(52873) (Show Source): You can put this solution on YOUR website!
.
Jane’s Seafood Diner serves 200 meals a day at an average price of $20.
The variable cost of each meal is $10, and the fixed costs of running the restaurant are $1,750 a day.
(a) What profit does the restaurant make?
(b) What is the average cost of a meal?
(c) By how much would the average cost of a meal fall if the number of meals served rose to
250 a day
~~~~~~~~~~~~~~~~~~~~~~~

(a)  The revenue is  R = 200 meals * 20 dollars.

     The total cost for the restaurant is  C = 200 meals * 10 dollars + 1750 dollars.

     The profit is  R - C = 200*20 - (200*10 + 1750) = 250 dollars.



(b)  The average cost of the meal is   = 18.75 dollars per meal.



(c)  By how much would the average cost of a meal fall =  = 1.75 dollars per meal.

Solved.

All questions are answered.

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