1. Tom a hotel operator has found out that due to Covid 19 he can sell 70 plates a week directly to customers if the price is Kshs 480 per plate. In error, the price was recently advertised at kshs 780 per plate and as a result only 40 plates were sold in the week. Toms fixed costs of production are Kshs 28,400 a week and variable costs are kshs 70 per plate.

Required:

1. The linear demand function ( Price function) in the form P = f (Q)
2. Break even plates and revenue
3. Assuming a suddent change in trading conditions due to covid 19 persistence resulting in a 20% reduction in demand at all levels. Find the new demand function and the corresponding break-even point in plates and shillings. (10 Marks)

2. Bigwa hotel sells meals whose data in two periods are as follows:

Period	Sales ($)	Variable costs ($)	Profit ($)
1	100,000	60,000	20,000
2	150,000	90,000	40,000

Assume that the selling price per unit, variable cost per unit and fixed costs are the same in the two periods.

Required

1. Determine the fixed costs
2. Break even sales revenue
3. What is the profit when sales are $ 800,000
4. What are the sales required for a profit of $ 420,000