What is Jaclyn’s new break-even point? If she sells 264 bubble teas, which option does she prefer?
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DONT SOLVE WRONG... SOLVE IF YOU ARE 5000% SURE
Jaclyn is considering opening a location on campus to sell bubble tea. Her rent would be $500/month and she expects to sell each drink for $5. Variable costs are $0.85 and labor is $1.77. She also has the option to share space with a friend, which would cost her only $300/month in rent. Her friend wants $0.03 per bubble tea revenue sharing.
What is Jaclyn’s new break-even point? If she sells 264 bubble teas, which option does she prefer?
a. She
b. She is indifferent between the two choices at Q=264.
c. She prefers working by herself at Q=264.
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