The manager at ABC Mart at a university is considering selling pizzas. He could buy frozen pizzas and heat them in an oven.
The cost of the oven and the freezer is $38,000.
The frozen pizza costs $5 each, and the manager believes he could sell the pizza for $11 each.
(a) determine how many pizzas would have to be sold for breakeven?
(b) if the mart sells 40 pizzas per day, how many days would it take to breakeven?
(c) after 25 days, the manager decides to lower the price of the pizza to $7. In spite of the falling price, the demand for the pizza also drops to 25 pizzas. What will be the new breakeven point?
(d) how many days will it take for the store to break even?