MARKETING: ​Kroger, the​ country's leading​ grocery-only chain, added a line of private label organic and natural foods call Simple Truth to its stores. If​ you've priced organic​ foods, you know they are more expensive. For​ example, a dozen conventionally farmed​ Grade-A eggs at Kroger costs consumers ​$1.501.50​, whereas Simple Truth eggs are priced at ​$3.453.45 per dozen. One study found​ that, overall, the average price of organic foods is 85 percent more than that of conventional foods.​ However, if prices get too​ high, consumers will not purchase the organic options. One element of sustainability is organic​ farming, which costs much more than conventional​ farming, and those higher costs are passed on to consumers. Suppose that a conventional egg​ farmer's average fixed costs per year for​ conventionally-farmed eggs are​ $1 million per​ year, but an organic egg​ farmer's fixed costs are fourfour times that amount. Further assume that the organic​ farmer's variable costs of ​$1.801.80 per dozen are twicetwice as much as conventional​ farmer's variable costs. Most large egg farmers sell eggs directly to retailers. If​ Kroger's margin is 2020 percent based on its retail​ price, the​ farmer's price per dozen to the retailer for conventional eggs is ​$1.201.20 and for organic eggs is ​$2.762.76. How many dozen eggs does a conventional farmer need to sell to break​ even? How many does an organic farmer need to sell to​breakeven? The variable cost per dozen of conventional eggs is ​$nothing. ​(Round to the nearest​ cent.)

Question

MARKETING:

​Kroger, the​ country's leading​ grocery-only chain, added a line of private label organic and natural foods call Simple Truth to its stores. If​ you've priced organic​ foods, you know they are more expensive. For​ example, a dozen conventionally farmed​ Grade-A eggs at Kroger costs consumers
​$1.501.50​,
whereas Simple Truth eggs are priced at
​$3.453.45
per dozen. One study found​ that, overall, the average price of organic foods is 85 percent more than that of conventional foods.​ However, if prices get too​ high, consumers will not purchase the organic options. One element of sustainability is organic​ farming, which costs much more than conventional​ farming, and those higher costs are passed on to consumers. Suppose that a conventional egg​ farmer's average fixed costs per year for​ conventionally-farmed eggs are​ $1 million per​ year, but an organic egg​ farmer's fixed costs are
fourfour
times that amount. Further assume that the organic​ farmer's variable costs of
​$1.801.80
per dozen are
twicetwice
as much as conventional​ farmer's variable costs.
Most large egg farmers sell eggs directly to retailers. If​ Kroger's margin is
2020
percent based on its retail​ price, the​ farmer's price per dozen to the retailer for conventional eggs is
​$1.201.20
and for organic eggs is
​$2.762.76.
How many dozen eggs does a conventional farmer need to sell to break​ even? How many does an organic farmer need to sell to​breakeven?
The variable cost per dozen of conventional eggs is
​$nothing.
​(Round to the nearest​ cent.)

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