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Question
Shalini set up a lemonade stand, spending Rs 2000. On an average, the cost of lemonade is Rs 5/glass. How many glasses of lemonade should she sell at Rs 10/glass to break even?
Shalini set up a lemonade stand, spending Rs 2000. On an average, the cost of lemonade is Rs 5/glass. How many glasses of lemonade should she sell at Rs 10/glass to break even?
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Solution
The correct option is B 400
Let q be the break-even quantity.
TFC = Rs 2000
AVC = Rs 5/glass
TVC = Rs 5q
TR = Rs 10q
For breaking even, TR=TC
Rs 2000 + Rs 5q = Rs 10q
5q = 2000
q = 400
400
Let q be the break-even quantity.
TFC = Rs 2000
AVC = Rs 5/glass
TVC = Rs 5q
TR = Rs 10q
For breaking even, TR=TC
Rs 2000 + Rs 5q = Rs 10q
5q = 2000
q = 400
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