Answer to Question #21556 in Economics of Enterprise for Jobi
The company puts a weekly advertisement in the local paper costing $120.
Each passenger is charged $45 (including lunch) for the return journey.
The fuel cost and other running costs total $45 per trip.
The driver’s wage is $120 per trip.
Lunch cost is $14 per person
The company would like to make a profit on a weekly basis even though some individual trips might operate at a loss.
(a) From the information given, plot the graphs of revenue and cost and find the number of passengers required per week to break even.
(b) Ideally the company would like to make $1000 profit per week, calculate the number of passengers required to make this happen.
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