(Q16). A publisher is planning to produce a new textbook. The fixed costs (reviewing, editing, typesetting and so on) are ₹320000. Besides that, he also spends another ₹31.25 in producing the book. The wholesale price (the amount received by the publisher) is ₹43.75 per book. How many books must the publisher sell to break even, i.e., so that the cost of production will equal revenues?

The publisher breaks even when costs equal revenues. If x represents the number of books printed and sold and y be the breakeven point, then the cost and revenue equations for the publisher are

Cost equation is given by y = 320000 + x
Revenue equation is given by y = x

Using the second equation to substitute for y in the first equation, we have

x = ₹320000 + x

x = ₹320000

x =
320000
 =

Thus, the publisher will break even when books are printed and sold.