Andy, a 10-year-old boy, wants to sell lemonade on a hot summer day. He hopes to make

Question:

Andy, a 10-year-old boy, wants to sell lemonade on a hot summer day. He hopes to make enough money to buy a new iPod. Joe, his elder brother, tries to help him compute his prospect of doing so. The following is the relevant information:

Variable costs

Lemonade ........$0.30 per cup

Paper cups ........$0.10 per cup

Fixed costs

Table and chair ......$36.00

Price ............ $1.00 per cup

The following graph depicts the dollar amount of cost or revenue on the vertical axis and the number of lemonade cups sold on the horizontal axis.

Andy, a 10-year-old boy, wants to sell lemonade on a

Required
a. Draw a line that depicts the total cost.
b. Draw a line that depicts the total revenue.
c. Identify the break-even point.
d. Identify the area representing profit.
e. Identify the area representingloss.