Break-even analysis. Table 1 contains price–demand and total cost data from a bakery for the production of kringles (a Danish pastry), where p is the price (in dollars) of a kringle for a daily demand of x kringles and C is the total cost (in dollars) of producing x kringles.
Table 1
x | p($) | C($) |
125 | 9 | 740 |
140 | 8 | 785 |
170 | 7 | 850 |
200 | 6 | 900 |
(A) Find a linear regression equation for the price–demand data, using x as the independent variable.
(B) Find a linear regression equation for the cost data, using x as the independent variable. Use this equation to estimate the fixed costs and variable costs per kringle.
(C) Find the break-even points.
(D) Find the price range for which the bakery will make a profit.
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