This weeks workshop walks you through a hypothetical research process for starting a small business brewing beer. Just like last weeks workshop, your final submission should be in the form of a memo to me (the one considering starting the business) written by you (my personal business consultant). For full credit, your memo must answer all the questions below, with support (work shown).

1. a) Some quick research online gives you an idea of prices to help get started making craft beer. You think that if I do this, I should go all-in and get an all grain brewing system, say about $800, plus bottling and other packaging equipment, about $400. After my fixed equipment costs, personal experience tells you that, for each small batch of ingredients which costs $48, I could reliably get about 40 beers that would pass a quality control test. What is a linear cost function () for producing beers?

2. b) Bent Paddle Brewing, an established successful craft brewery in Duluth, sells 6-packs on average for $9.99. You think that, as someone who is just starting their own brand, I would need to have lower prices than Bent Paddle in order for people to be interested in my product. Lets say we start selling at $9 per 6-pack. Find a linear revenue function () and a profit function ().

3. c) How many beers would I need to sell to break-even? How many 6-packs is that?

4. d) Because of some friends and family, youre pretty confident I could sell at least 5 6- packs a week starting out. Possibly, as my product gains popularity, I could sell up to 20 6-packs per week. Allowing for some uncertainty, you assume a modest average of 10 6- packs per week will be sold over the course of the next year or two. If this is the case, how long would it take to break even?