Gina Chuez has considered starting her own custom greeting card business. With an initial start up cost of $1500, she figures it
will cost $0.45 to produce each card. In order to remain competitive with the larger greeting card companies, Gina must sell her cards for no more than $1.70 each. To make a profit, her income must exceed her costs. Determine the number of cards she must sell before making a profit.
The more she charges for her cards, the fewer cards she'll have to sell <span>to recover her start-up costs. So naturally, she wants to charge as much </span> <span>for each card as she can get away with. </span>
<span>Let's start out assuming she charges the maximum of $1.70 for each one </span> <span>(and that there are customers willing to pay $1.70 to buy one.) </span>
It costs Gina $0.45 to produce a card, and she sells it for $1.70. <span>Her profit from selling each card is ($1.70 - $0.45) = </span>$1.25 profit.
<span>How many times does she need $1.25 in profit to get back the $1500 </span> that she sank into the business to get it started ?
<span> ($1500) / ($1.25 per card) = </span>1,200 cards .
<span>That's the </span>minimum<span> number she must sell, and it only works if she </span> <span>charges the full $1.70 for each card. If she charges a lower price </span> <span>for them, then she'll need to sell </span>more<span> cards to make up the $1500 . </span>
