Hank runs a successful hot dog stand right across from the arch at the University of Georgia in downtown Athens. Hank has to ord
er his hot dogs, buns, mustard, relish, and all other condiments in bulk, as well as pay taxes, licensing fees, and other small business expenses. Therefore, Hank has a relatively large “sunk” cost associated with his business – it averages out to $950 per week just to keep the cart open. The cost of producing hot dogs is given by C(h) = 950 + .45(h). Where h is the number of hot dogs and C(h) is the cost. If he sold 100 hotdogs at $10.25 each, how much profit would he make for the week?
<span>First, subtract the estimated
tickets that will be sold from the actual tickets sold. 200 – 224 = -24, ignore
the negative sign, so the error is 24. Then, divide the error by the actual
ticket sold, 24/224= 0.1071 and multiply the answer by 100 to get the percentage.
So, the percentage error is 10.7%. </span>
