Chapter 4.1, Problem 71E

Break-even analysis. A company markets exercise DVDs that sell for $\text{\$}19.95,$ including shipping and handling. The monthly fixed costs (advertising, rent, etc.) are $\text{\$}24,000$ and the variable costs (materials, shipping, etc) are $\text{\$}7.45$ per DVD.

(A) Find the cost equation and the revenue equation.

(B) How many DVDs must be sold each month for the company to break even?

(C) Graph the cost and revenue equations in the same coordinate system and show the break-even point. Interpret the regions between the lines to the left and to the right of the break-even point.