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Ms. Tui is having new floors installed in her house. Floor Company A charges $90for installation and $9 per square yard of flooring. Floor Company B charges $50for installation and $13 for each square yard.

Sagot :

We have two cost functions.

Company A charges a fixed value of $90 and a variable cost of $9 per sq yd.

[tex]C_A=90+9x[/tex]

Company B chargesa fixed value of $50 and a variable cost of $13 per sq yd.

[tex]C_B=50+13x[/tex]

The breakeven point for the square yard of the floor, when both cost are the same, can be calculated as:

[tex]\begin{gathered} C_A=C_B \\ 90+9x=50+13x \\ 90-50=13x-9x \\ 40=4x \\ x=\frac{40}{4} \\ x=10 \end{gathered}[/tex]

The breakeven point is x=10 sq yd.

If x>10, company B is more expensive that company A.

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