Price decisions impact both the customer's perception of value and also profitability for the seller. One of the most important tools a

marketer has for making appropriate pricing decisions is breakeven analysis. Break$-$even analysis tells a marketer how many units of a

product are required to be sold to cover all costs. As outlined in the chapter, break$-$even $=$ fixed costs $\frac{?}{?}($price per unit $-$ variable cost

per unit$).$

Assume you have a part$-$time job $($while you are going to school$)$ as a photographer, taking pictures for events such as weddings,

parties, and other social events. Spring is your best time of the year and you want to see if you can grow the business this year,

particularly the wedding portion of your business. In the past, you have offered a wedding package that includes taking pictures of the

wedding events, organizing the wedding photos into both a physical and digital album, and providing a digital copy of the wedding

photos set to music. Your estimated cost incurred for a wedding package is $$900$ and you charge customers $$2,600$ for your wedding

package. You normally spend $$5,300$ on advertising and promotion, which in the past has averaged $10$ weddings per spring. You are

considering three pricing options for this spring and need to decide what you should do: Option $1,$ keep the price the same; Option $2,$

drop the price by $$300$; Option $3$ raise the price by $$300.$

Use break$-$even analysis to determine the break$-$even point in units needed to cover the $$5,300$ in fixed costs you spend on

advertising. How many weddings do you need to work to pay for the advertising if you keep your price the same, lower it by $$300,$ and

raise it by $$300?$ Use the table below to help work through the different break$-$even calculations. $($Round answers to $2$ decimal places, e$.$g

$15\mathrm{.}25.)$

Break$-$Even Units