The following question relate to a community that is circular in nature with a one mile circumference. There are 81 people evenly distributed around the lake where the town is built. The travel cost is $10 per mile, a restaurant costs $100 to set up, and the cost per meal is $2. Beginning from the initial population of 81, how high would the cost per mile have to go before the optimal number of restaurants would be one more than it was with transportation costs at $10 per mile? Round off small residuals to the nearest whole number.
What will be an ideal response?
Using the equation N2 = tL/2F and solving for t, the formula becomes t = N22F/L. By substituting a 3 for N to find t the answer comes out to $22.22. At that cost per mile, the community should have 3 restaurants.
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