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The owner of Genuine Subs, Inc. hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.60 cents per sandwich. Sandwiches sell for $2.56 each in all locations. Rent and equipment costs would be $5,070 per month for location A, $5,580 per month for location B, and $5,710 per month for location C.
a) Calculate the total cost function for each location?
b) Plot the total cost functions on the same graph?
c) On the graph, identify the range of output for which each location has the least cost?
d) Which location would yield the greatest profits?
e) Determine the volume necessary at each location to realize a monthly profit of $9500.
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