Joyce and Chris each operate local french fry shops. Joyce’s place is called AutoFries and is highly automated. She pours potatoes into one end of an expensive machine, and fries come out at the other end. Her costs are
$10,000 per month plus $0.10 per box of fine fries.
Chris’s place is called Human Touch Fries. She uses manual peelers and frypersons. Her costs are $2,000 per month plus $0.30 per box of fine fries.
Required:
At what volume of boxes would the cost per box be the same for both? What if sales were higher than this volume? Lower? Comment on their relative profits.