$$

Kroger

$,$

$$the

$$

$$country$\text{'}$s leading

$$

$$grocery

$-$

only chain, added a line of private label organic and natural foods call Simple Truth to its stores. If

$$

$$you$\text{'}$ve priced organic

$$

$$foods$,$ you know they are more expensive. For

$$

$$example$,$ a dozen conventionally farmed

$$

$$Grade

$-$

A eggs at Kroger costs consumers

$$

$

$$

$2$

$.$

$3$

$5$

$,$

$$whereas Simple Truth eggs are priced at

$$

$

$4$

$.$

$9$

$0$

$$per dozen. One study found

$$

$$that$,$ overall, the average price of organic foods is

$8$

$5$

$$percent more than that of conventional foods.

$$

$$However$,$ if prices get too

$$

$$high$,$ consumers will not purchase the organic options. One element of sustainability is organic

$$

$$farming$,$ which costs much more than conventional

$$

$$farming$,$ and those higher costs are passed on to consumers. Suppose that a conventional egg

$$

$$farmer$\text{'}$s average fixed costs per year for

$$

$$conventionally

$-$

farmed eggs are

$$

$$$

$1$

$$million per

$$

$$year$,$ but an organic egg

$$

$$farmer$\text{'}$s fixed costs are five times that amount. Further assume that the organic

$$

$$farmer$\text{'}$s variable costs of

$$

$

$2$

$.$

$6$

$0$

$$per dozen are twice as much as conventional

$$

$$farmer$\text{'}$s variable costs.

Most large egg farmers sell eggs directly to retailers. If

$$

$$Kroger$\text{'}$s margin is percent based on its retail

$$

$$price$,$ the

$$

$$farmer$\text{'}$s price per dozen to the retailer for conventional eggs is

$$

$

$1$

$.$

$6$

$5$

$$and for organic eggs is

$$

$

$.$

$3$

$.$

$4$

$3$

$$How many dozen eggs does a conventional farmer need to sell to break

$$

$$even$?$ How many does an organic farmer need to sell to

$$

$$breakeven$?$

$$

Hint: See the

$$

$$Pricing$,$ Break

$-$

Even, and Margin Analysis sectioThe$$ break$-$even volume for conventional eggs is

$$

enter your response here dozen. $($Round to the nearest whole$$ number.$)$

n of Appendix

$3$

$$in your textbook.