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The graph shows the total cost and revenue functions for a small business manufacturing widgets. The total cost includes both...

GMAT Algebra : (Alg) Questions

Source: Prism
Algebra
Systems of 2 linear equations in 2 variables
EASY
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Notes
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The graph shows the total cost and revenue functions for a small business manufacturing widgets. The total cost includes both fixed costs and variable production costs per unit. At what point (units sold, dollars) does the business break even?

A

\((4, 6)\)

B

\((6, 7)\)

C

\((8, 8)\)

D

\((10, 6)\)

Solution

1. TRANSLATE the business question into a mathematical requirement

The question asks "when does the business break even?"

  • TRANSLATE this business term:
    • Break even = Total Cost equals Revenue
    • Mathematically: \(\mathrm{Total\ Cost = Revenue}\)
    • Graphically: Where do these two lines intersect?

2. VISUALIZE by identifying the key elements on the graph

  • Locate the two lines:
    • Solid line = Total Cost (starts at \(\mathrm{y = 4}\), showing fixed costs of $400)
    • Dashed line = Revenue (starts at origin)
  • Find where they cross:
    • There's a marked point (shown with a dot) where both lines meet
    • This is the intersection point we need

3. VISUALIZE the coordinates by reading from the graph

  • Read the x-coordinate (horizontal):
    • The intersection occurs at \(\mathrm{x = 8}\)
    • This means 8 hundreds = 800 units sold
  • Read the y-coordinate (vertical):
    • The intersection occurs at \(\mathrm{y = 8}\)
    • This means 8 hundreds = $800 (both cost and revenue)

4. Verify the answer makes sense

  • At 800 units sold:
    • Total Cost = $800
    • Revenue = $800
    • Profit = $0 ✓ (This confirms break-even)

Answer: \(\mathrm{(8, 8)}\) - Choice C




Why Students Usually Falter on This Problem

Most Common Error Path:

Weak TRANSLATE skill: Student doesn't connect "break even" with "intersection point"

Some students may understand break-even conceptually but don't realize it means finding where the lines cross. Instead, they might:

  • Look for a specific point on one line only
  • Try to calculate something from the graph instead of just reading coordinates
  • Confuse break-even with maximum profit or some other concept

This leads to confusion and random selection among answer choices.


Second Most Common Error:

Poor VISUALIZE execution: Misreading the graph coordinates

Students might:

  • Confuse which line is which (reading from Total Cost instead of the intersection)
  • Miscount the gridlines (reading 7 or 9 instead of 8)
  • Read only one coordinate correctly but miss the other

For example, if they misread and think the intersection is at \(\mathrm{(4, 6)}\), they might select Choice A \(\mathrm{(4, 6)}\). Or if they read it as \(\mathrm{(6, 7)}\), they might select Choice B \(\mathrm{(6, 7)}\).


The Bottom Line:

This problem tests whether students can bridge business terminology with graphical analysis. Success requires both understanding what "break even" means mathematically and accurately reading coordinates from a visual representation. The actual mathematics is simple—the challenge is in the interpretation and precision of graph reading.

Answer Choices Explained
A

\((4, 6)\)

B

\((6, 7)\)

C

\((8, 8)\)

D

\((10, 6)\)

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