Week 7 · Assignment: Traditional alternative (no AI)

Week 7 — The Price Sets the Bar: A Print Studio Finds Its Break-Even — Traditional alternative (no AI)

Introduction to Business Free sample edition

Traditional alternative (no AI), unpublished. In the course this is a separate assignment that ships unpublished beside the adaptive assignment: same objective, no AI. An instructor who prefers it publishes it and unpublishes or deletes the adaptive one, as the note at its top says.

Instructors: publish this instead of the adaptive version if you prefer, and unpublish or delete the adaptive one.

Assignment 7 of the term — find a break-even point, see what a lower launch price does to it, and explain the idea to someone new to business.

This week you learned how a business decides whom to serve and what to charge: the marketing concept, target markets and segmentation, the four Ps, products versus services, the product life cycle, fixed and variable costs, the break-even point, markup versus margin, and skimming versus penetration pricing. In this assignment you find how many shirts one small studio must sell to cover its costs, see what a lower launch price does to that number, and explain the idea to someone who has never studied business. This week's lecture tutorial, quiz, discussion, and Business Case Workshop practise the same ideas from other angles.

The task

The case is illustrative, built for this course and not real data. A small screen-printing studio prints custom T-shirts for local teams, clubs, and events. Like the coffee cart in this week's chapter, the case has no named people.

The studio's figures, line by line:

Price of one custom T-shirt: 20 dollars.
Blank shirt and ink for one T-shirt: 8 dollars.
Fixed costs (rent, insurance, and equipment payments): 21,000 dollars a year.
A possible launch price for a new line of shirts: 16 dollars.

Work these two problems, showing every step of the arithmetic:

What is the studio's break-even point, in shirts a year, at 20 dollars a shirt?
The owner considers a 16-dollar penetration price for a new line of shirts instead of 20 dollars, with the same blank-and-ink cost and the same fixed costs. What is the studio's break-even point, in shirts a year, at the 16-dollar price?

Beside each answer, add a brief interpretation:

Problem 1: name the per-unit margin and explain why dividing the fixed costs by the 20-dollar price would give too low a count; then name at least two stakeholders who are affected by how many shirts the studio must sell, and say how.
Problem 2: explain, using the per-unit margin, why the lower price moves the break-even the way it does; say whether the 16-dollar launch is skimming or penetration pricing and describe in words how strongly the studio's buyers might react to the lower price; then name a target market for the new line and the segmentation base that defines it.

Explain it to a non-expert

A cousin who sells handmade candles at weekend markets asks you, "If I drop my price, I'll sell more and break even sooner, right?" Write a 3–5 sentence message that explains what a break-even point is, answers the question in everyday words, and names one limit, including that the studio case is illustrative and that a break-even assumes one price and a steady cost per item. Explain any technical term in everyday words. More than one good answer is possible.

For a different, ungraded example, imagine a youth soccer league that sells tickets for a fundraising car wash. Model answer: "Some costs stay the same however many tickets you sell, like the soap and the hose rental for the day; other costs grow with each ticket, like the towel each car uses. The break-even point is how many tickets you have to sell before the money left over from each ticket has paid for those fixed costs. If you lower the ticket price, each ticket leaves less money over, so you need to sell more tickets to get there, not fewer. That only works out if the lower price brings in enough extra people, and the count assumes every ticket sells at the same price."

Use that pattern for the cousin's candles, with your own wording and evidence.

Show your work. A reader should be able to rebuild every amount you report from the studio's price, cost, and fixed-cost figures without guessing which numbers you used.

Deliverables

Submit a single report containing:

the two answers, each with every step of the arithmetic shown and the interpretation the task names for that problem;
your message to the cousin, explaining a break-even point, answering the question about a lower price, and naming one limit; and
a side-by-side comparison of the studio at 20 dollars and at 16 dollars, listing the price, the per-unit margin, and the break-even each time, so your amounts can be checked.

Keep it to roughly one page. Clear and correct beats long.

Choose how you show it. Present your report as written text, or as a recorded audio or video explanation of about three minutes with a transcript, or as a labelled sketch of the studio's costs and its two break-even points with a short note. Every form is graded by the same scoring criteria. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

How you'll be graded

The full analytic rubric is attached to this assignment in Canvas.

Academic integrity and AI use

This version is designed to be completed without AI: do the arithmetic, the interpretations, and the writing yourself, without a chatbot or other AI tool. You may use a free spreadsheet to lay out the studio's figures. Submitting AI-generated work as your own, or copying another student's work, is an integrity violation under the course policy.

Built with The Course Maker · samples.thecoursemaker.com