Assignment:

You are thinking of opening a small copy shop. It costs $5000 to rent a copier for a year and costs $0.03 per copy to operate the copier. Other fixed costs of running the store will amount to $400 per month. You plan to charge an average of $0.10 per copy, and the store will be open 365 days per year. Each copier can make up to 100,000 copies per year.

a. For 1 to 5 copiers rented and daily demands of 500, 1000, 1500, and 2000 copies per day, compute annual profit. That is, compute annual profit for each of these combinations of copiers rented and daily demand.

b. If you rent 3 copiers, what daily demand for copies will allow you to break even?

c. Graph profit as a function of the number of copiers for a daily demand of 500 copies; for a daily demand of 2000 copies. Interpret your graphs.