1. The buyer of a new car wants to determine whether it will be more cost efficient to run the car she chose using E85 flex-fuel or regular gasoline.

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To decide which fuel is more cost efficient, the buyer needs to compare the “cost per mile” for both fuels. In other words, she must determine how much it costs to drive one mile when filling up with regular gasoline versus using E85 flex‐fuel. Here’s how to go about it:

1. Gather the necessary information:
 a. The price per gallon for regular gasoline (let’s call this PG).
 b. The price per gallon for E85 (PE).
 c. The fuel economy (miles per gallon, or MPG) when using gasoline (AG).
 d. The fuel economy when running on E85 (AE).

Note: Many vehicles running on E85 achieve fewer miles per gallon than they do on gasoline. Often, you might see about a 15–25% decrease in MPG when using E85. For instance, if a car gets 30 MPG on gasoline, it might get roughly 22.5 MPG on E85.

2. Calculate the cost per mile for each fuel:
 • For gasoline: Cost per mile = PG ÷ AG.
 • For E85:   Cost per mile = PE ÷ AE.

3. Compare the two:
 – If (PE ÷ AE) is less than (PG ÷ AG), then driving on E85 is more cost efficient.
 – If (PG ÷ AG) is less than (PE ÷ AE), then regular gasoline will save money per mile.

4. An alternative way of looking at it is to find the price break‐even point for E85. Set the cost per mile equal for both fuels:
  PG ÷ AG = PE ÷ AE
 Multiply both sides by AG:
  PG = (PE ÷ AE) × AG
 Solve for PE:
  PE = PG × (AE ÷ AG)

This equation tells you that if the price of E85 (PE) is lower than PG multiplied by the ratio (AE ÷ AG), then E85 is more cost effective. For example, if AE is about 75% of AG because of a decline in fuel economy (i.e., AE/AG = 0.75), then the break‐even condition for E85 would be:
  PE < 0.75 × PG

5. Use a numerical example:
 Suppose gasoline costs $3.50 per gallon and the car gets 30 MPG on gasoline. If the car gets about 22.5 MPG on E85 (which is 75% of 30 MPG), then the break‐even price for E85 would be:
  Break‐even E85 price = 0.75 × $3.50 = $2.63 per gallon.
 • If E85 is sold for less than $2.63 per gallon, then it is more cost efficient.
 • If it costs more than $2.63 per gallon, then regular gasoline would cost less per mile.

In summary, the buyer should obtain the current fuel prices and her vehicle’s MPG ratings for both fuels, compute the cost per mile for each, and then make her decision based on which cost per mile is lower. This approach gives a clear, quantitative method for comparing the economic efficiency of using E85 versus regular gasoline.
To determine which fuel is more cost efficient, compare the cost per mile for E85 and regular gasoline. Calculate the cost per mile for each by dividing the price per gallon by the miles per gallon for that fuel. If E85's cost per mile is lower, it's more economical. Use the break-even formula to find the price at which E85 becomes cheaper.

1. The buyer of a new car wants to determine whether it will be more cost efficient to run the car she chose using E85 flex-fuel or regular gasoline.

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