Example 9.5.1.
The Pizza Connection calculates that the cost, in dollars, of producing pizzas per day is given by
The Pizza Connection charges $15 per pizza, so the revenue from selling pizzas is
How many pizzas per day must the Pizza Connection sell in order to break even?
Solution.
To break even means to make zero profit. Because
the break-even points occur when revenue equals cost. In mathematical terms, we would like to find any values of for which If we graph the revenue and cost functions on the same axes, these values correspond to points where the two graphs intersect. Use the WINDOW settings
on your calculator to obtain the graph shown below. You can verify that the two intersection points are and
Thus, the Pizza Connection must sell either 15 or 80 pizzas in order to break even. On the graph we see that revenue is greater than cost for -values between 15 and 80, so the Pizza Connection will make a profit if it sells between 15 and 80 pizzas.