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Hot Dog pricing

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Annie McCoy, A student at Tech, plan to open a hot dog stand inside Tech's football stadium during home games. There are seven home games scheduled for the upcoming season. She must pay the Tech athletic dpartment a vendor's fee of $3,000 for the season. Her stand and other equipment will cost her $4,500 for the season. She estimaties that each hot dog she sells witll cost her $0.35. She has talked to friends a other universities who sell hot dogs a games. Bosed on their information and the athletic department and the athletic department's forecast that each game witll sell out, She anticipates that she will sell approximately 2,000 hot dogs during each game.

A. what price should she charge for a hot dogs in order to break even?

b. What factors might occur during the season that would alter the volume sold and thus the break-even price annie might charge?

C. What price would you suggest that Annie chage for a hot dog to provide her with a reasonable profit while remaing competitive with othe food vendeors?

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Hot Dog pricing

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Total Cost for the season:
3000 + 4500+ .35multiplied by 14000hot dogs(2000 hot dogs per game* 7 games)

$12400.

Break even price: $12400/14000= .90 cents per ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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