1. The problem statement, all variables and given/known data John pays $500 to a tailor for a regular supply of new shirts. The tailor delivers 5 black shirts. He next wants to purchase 10 red shirts at the contract rate of $11 per shirt. For the black and the red shirts together, what are the fixed and variable cost of the shirts? John's discount rate is 12%. 2. Relevant equations 3. The attempt at a solution Hi! So I'm having a lot of trouble with this problem. The first time I attempted this problem I assumed that the fixed cost was $500 and tried applying the discount rate to the $11 per red shirt and multiplying by 10. This was completely wrong. I think the discount rate is thrown in there to confuse me. What I'm supposed to do is find two data points and then use y=mx+b to find the fixed and variable cost. But how do I find the data points? Can I just do this?: ($500,5) ($110,10) (I multiplied 10*$11) But I think this gives me a negative marginal cost... Which means this is wrong also.