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Charlie is planning to start a business selling kitten mittens. He figured that the fixed costs would be: Cats $100 Knitting Machine $5,000 Warehouse $10,000
Charlie is planning to start a business selling kitten mittens. He figured that the fixed costs would be:
Cats | $100 |
Knitting Machine | $5,000 |
Warehouse | $10,000 |
Truck | $2,000 |
He also knows that variable cost (per unit) is:
Yarn | $2 |
Labor | $1 |
He wants to sell a pair (unit) of kitten mittens for $15.
1.) Charlie is pretty sure that the demand function is as following: = 80,000 - 2 .According to the demand function, is there enough demand for them to break even if they sell the kitten mittens for $15 a pair (unit)? In other words, how many consumers are willing to pay $15 or more for a pair of kitten mittens?
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