Question 510130
Profit = Total Revenue - Total Cost
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Total Cost = Variable Cost per Unit * Number of Units Produced + Fixed Costs
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Total Revenue = Sales Price * Units Sold
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x = number of candles
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TC = $1/candle * x candles + $100
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TR = $5/candle * x
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We want to find the point where TC =TR, which is the break-even point.
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1x + 100 = 5x
100 = 4x
x = 25
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So when you sell 25 candles at $5, you achieve $0 profitability.
Of course, that means you have paid your fixed costs ($100).
In turn that means the rest of your candles sales contribute profit.
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In the following graph, the red line is TC and the green line is TR.
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{{{graph(500,500,-5,30,-4,150,x+100,5*x)}}}