SOLUTION: Spartanland has a stand that sells souvenir hats. Last year the stand charged $5 each, and they sold 150. they want to increase the price this year, and they expect to lose 10 sale
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Question 1032035: Spartanland has a stand that sells souvenir hats. Last year the stand charged $5 each, and they sold 150. they want to increase the price this year, and they expect to lose 10 sales for each $1 increase. The sales revenue, R, in dollars, generated by selling the hats is predicted by the function: R = (5 + p) (150 - 10p), where p is the price increase in dollars
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Spartanland has a stand that sells souvenir hats. Last year the stand charged $5 each, and they sold 150. they want to increase the price this year, and they expect to lose 10 sales for each $1 increase. The sales revenue, R, in dollars, generated by selling the hats is predicted by the function: R = (5 + p) (150 - 10p), where p is the price increase in dollars
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The usual question on this type of problem is to maximize Revenue.
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R = 5*150 -50p + 150p - 10p^2
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R = -10p^2 + 100p + 750
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Maximum R occurs when p = -b/(2a) = -100/(2*-10) = 5
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To maximize revenue increase the price by $5
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Cheers,
Stan H.
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