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A couple of entrepreneurial business students at State University decided to put their education into practice by developing a tutoring company for busi- ness students. While private tutoring was offe
A couple of entrepreneurial business students at
State University decided to put their education into
practice by developing a tutoring company for busi-
ness students. While private tutoring was offered, it
was determined that group tutoring before tests in
the large statistics classes would be most beneficial.
The students rented a room close to campus for $300
for 3 hours. They developed handouts based on past
tests, and these handouts (including color graphs)
cost $5 each. The tutor was paid $25 per hour, for a
total of $75 for each tutoring session.
(a) If students are charged $20 to attend the session,
how many students must enroll for the company
to break even?
(b) A somewhat smaller room is available for $200
for 3 hours. The company is considering this
possibility. How would this affect the break-even
point?
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