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Jim-Bob's Bar-B-Q is planning to open a new pit-style barbeque take-out-only restaurant near the football stadium. They will sell only one product: a pulled-meat sandwich.

  1. Jim-Bob's Bar-B-Q is planning to open a new pit-style barbeque take-out-only restaurant near the football stadium. They will sell only one product: a pulled-meat sandwich. Annual fixed costs are $100,000; the average variable cost per sandwich is $2.

  1. If Jim Bob expects to sell 12,000 sandwiches per year, calculate the average total cost per sandwich.
  2. Calculate the break-even price per sandwich if Jim Bob only sells 7,333 sandwiches per year.
  3. Suppose instead that the most Jim Bob can charge for a sandwich is $7.50. How many sandwiches must he sell in order to break even?

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