You need to compare the cost of two choices for a service. Create an equation fo

Question

You need to compare the cost of two choices for a service. Create an equation for each choice based on:

1. fixed cost
2. variable cost

Write an inequality to compare the options.

Here is the beginning an example to help you get started: I am trying to decide whether to install a solar energy system or replace my existing gas system. The solar system will cost $20,000 to install but only $25 per month. The equation for the total cost is Solar Cost = 25x + 20000 where x is the number of months. The gas system will only cost $5,000 to install but will cost $125 per month. The equation is Gas Cost = 125x + 5000

Explanation / Answer

Ans.Variable costs vary with the amount produced. Fixed costs remain the same, no matter how much output a company produces. A variable cost is a company's cost that is associated with the amount of goods or services it produces. A company's variable costincreases and decreases with the production volume but fixed costs remains the same.

Here the equation of solar system is fixed but the equation of gas system is variable.

Fixed cost is < or = variable cost.

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