Michael’s Lobster Food Truck has been operating for three years, but he’s yet to make a profit in the competitive food truck industry. Last year, he sold 2,500 items at an average price of $12. It costs him $9 to cover his ingredients for each item, and he also has fixed costs of $8,000 per year to cover for his truck, marketing, insurance, etc. What percentage increase in the number of units sold is required for Michael to break even?
Michael’s Lobster Food Truck has been operating for three years, but he’s yet to make a profit in the competitive food truck industry. Last year, he sold 2,500 items at an average price of $12. It costs him $9 to cover his ingredients for each item, and he also has fixed costs of $8,000 per year to cover for his truck, marketing, insurance, etc. What percentage increase in the number of units sold is required for Michael to break even?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Michael’s Lobster Food Truck has been operating for three years, but he’s yet to make a profit in the competitive food truck industry. Last year, he sold 2,500 items at an average
AI-Generated Solution
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education