A movie theater has fixed costs of $3000 per day, and variable costs of $5 per c

Question

A movie theater has fixed costs of $3000 per day, and variable costs of $5 per customer. The theater sells admisison tickets for $11 each.

(a) Give the theater's daily cost function, expressing total cost per day in terms of the number of customers per day. (

b) Give the theater's revenue function, giving daily revenue in terms of the number of customers per day

(c) How many customers must buy admission in a day for the theater to break even that day?

(15) A movie theater has fixed costs of s3000 per day, and variable costs of $5 per customer. The theater sells admisison tickets for $11 each. (a) Give the theater's daily cost function, expressing total cost per day in terms of the number of customers per day. (b) Give the theater's revenue function, giving daily revenue in terms of the num- ber of customers per day (c) How many customers must buy admission in a day for the theater to break even that day?

Explanation / Answer

a) C(X) = Fixed cost + variablecost

= 3000+5x where x is the no of customers

b) R(x) = REvenue =selling price (x) = 11x

c) P(x) = Profit function= Revenue-cost

= R(x)-C(x)

= 11x-3000-5x

= 6x-3000

Breakeven stage P(x) =0

i.e. 6x=3000

Or x=500

When 500 tickets are sold there is no profit or no loss and that is the Break even point

Break even sales = 11(500) = 5500

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