Question

1.2. After vacationing in the Amalfi Coast a local bar owner is considering whether or not to sell a signature lemon espresso drink. They would like to buy an imported Italian espresso machine for $8000 and estimate that including labor, the cost to make a single espresso shot with lemon is $0.45. They plan to sell the drink for $2.40 a. Write down the linear cost function C(d), where d is the number of espresso drinks b. Write down the revenue function R(d), whered is the number of espresso drinks c. On what intervals are your cost and revenue functions valid? Explain why. d. Find the minimum break-even quantity of lemon espresso drinks e. Is it reasonable for the bar owner to expect to break even within 18 months if she expects to sell about 6 espresso shot drinks per day? Explain why or why not.

Answer 1

@ 6(d) = 600+ 0.45d R(d) = 2.40 Both the functions are valid © for non neg abre ustege d. d = 0+1, +2, +3..~ no of expresno drinks cannot To be negarre and number as I f drinks whole numbe For breate even Cld) = R(d) = 600+ • 45 d = 2.40 buvo - 1950 = buco -) - 19 @ = 307692 So minimum brush-wen guachty 5 13017! 6* 30 * 18 = 3240 extremo so drinus can be sold 32407 3077 - This is why the bar nine will be expany to break even R( 3240) 2.4x3240 = $7776 C (3&4o) = funt '45* 3240 - $7458 2 (324007 (3240) Profit is expecte to be made