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Lesson · Mathematics

Fixed fee versus usage fee

Two plans are priced differently, and you solve the equation but forget to say which one to choose.

To compare a fixed-fee plan with a pay-per-use plan, write each cost as an expression, set them equal to find the break-even point, then state which plan is cheaper on each side.

This lesson is part of choosing a model from imperfect information. It follows deciding which quantities are necessary.

How do I find the break-even point?

Follow these four steps. The last one is a sentence, not a number.

  1. Let one letter stand for the quantity and write each cost as an expression.
  2. Set the two costs equal and solve.
  3. Test one quantity below and one above the answer.
  4. Write the decision in a sentence.

Worked example: two printing shops

Shop A charges a RM15 setup fee plus RM0.10 per page. Shop B charges RM0.25 per page with no setup fee. Let p be the number of pages.

Costs. Shop A: 15 + 0.10p. Shop B: 0.25p.

Equal. 15 + 0.10p = 0.25p, so 15 = 0.15p, and p = 100.

Test below. At p = 50, Shop A costs 15 + 5 = RM20 and Shop B costs RM12.50. Shop B is cheaper.

Test above. At p = 200, Shop A costs 15 + 20 = RM35 and Shop B costs RM50. Shop A is cheaper.

Decision. For fewer than 100 pages, Shop B is cheaper. For more than 100 pages, Shop A is cheaper. At exactly 100 pages both cost RM25.

The two tests confirm the direction. Without them, the decision sentence is a guess.

The mistake that costs marks

The common slip is to stop at p = 100 and write “the break-even point is 100 pages”. It answers a different question from the one asked.

Step Wrong Right
Solve p = 100 p = 100
Test a side not done p = 50 and p = 200
Conclusion “100 pages” “B is cheaper below 100 pages, A above 100”

The question asked which plan to choose, so the sentence about each side is the answer.

Check yourself

Plan X charges RM20 every month plus RM2 for each film. Plan Y charges RM8 per film with no monthly fee. Let f be the number of films. Find the break-even point and decide which plan is cheaper.

Answer

Costs: Plan X is 20 + 2f and Plan Y is 8f. Setting them equal gives 20 = 6f, so f = 3⅓.

Films come in whole numbers, so test 3 and 4. At f = 3, X costs RM26 and Y costs RM24, so Y is cheaper. At f = 4, X costs RM28 and Y costs RM32, so X is cheaper.

Plan Y is cheaper for 3 films or fewer. Plan X is cheaper for 4 films or more.

What to study next

Read testing whether a model still works outside the supplied data range next. Then use the integrated practice set to mix the skills.

The algebra step repair trainer helps if solving for the break-even quantity is the slow step. For a teacher to check your decision sentences, see online one-to-one Mathematics tuition.

Common questions

What is a break-even point?

It is the quantity at which two options cost the same. Set the two cost expressions equal and solve. Below it one option is cheaper, and above it the other is.

Why do I need to state which plan is cheaper?

The question asks for a choice, and the break-even point alone does not make one. The decision depends on how much the person will use, so state the cheaper plan on each side.

What if the break-even value is not a whole number?

Give the exact value, then decide using whole quantities. If you cannot print 3.33 pages, compare the costs at the whole numbers on either side.

How do I check my answer?

Substitute a value below and a value above the break-even point into both costs. The cheaper plan must match your decision on each side.

If you find the break-even point but lose marks on the conclusion, one-to-one Mathematics lessons let a teacher practise writing the decision sentence on your own comparisons.

  • Online one-to-one lessons for your child with an experienced teacher.
  • Your first class is a one-hour trial, from RM50. The fee is agreed before you book.
  • Happy with the teacher? Continue with lessons of about 1.5 hours. If not, ask for another teacher.