A store charges $12.50 for 5 boxes of cookies.

Question

A store charges $12.50 for 5 boxes of cookies. A second store charges $8.00 for 4 boxes of cookies, but you have to buy a gallon of milk for $3.00 to get that deal. Write the cost model equations for both stores, and find the numbr of boxes of cookies that makes the costs equal.

Answer 1

Assuming you do not have to buy in the set bulk quantities, the optimal answer appears to be 6?

Total Cost = Fixed Cost + Variable Cost x Quantity

Cost Store 1 = 0 + ($12.5 /5) x 1 Boxes (b)

C1= 2.5b

Cost Store 2 = 3 + ($8/4) x 1 Boxes (b)

C2= 3+ 2b

Set cost or equations equal to each other.

2.5b = 2b +3

.5b=3

b = 6

if you plug it back into both equations, you solve for 15$, the price level for 6 boxes. Otherwise, I'd stick with store 2 after 6 boxes when it is cheaper overall.