Answer:
The indifference point is 20 gallons.
Step-by-step explanation:
Giving the following information:
Quik-Clean Car Wash:
$15 for a car wash plus $2.50 per gallon for unleaded gasoline.
Mighty Clean Car Wash:
$10 for a carwash plus $2.75 per for unleaded gasoline.
<u>First, we need to structure the total cost formula:</u>
Quik-Clean= 15 + 2.5x
Mighty Clean= 10 + 2.75x
x= gallon of gasoline
<u>Now, we equal both formulas and isolate x:</u>
15 + 2.5x = 10 + 2.75x
5 = 0.25x
20 = x
The indifference point is 20 gallons.
Prove:
Quik-Clean= 15 + 2.5*20= $65
Mighty Clean= 10 + 2.75*20= $65