SOLUTION: A magazine has a circulation of 140 thousand per month when they charge $2.50 for a magazine. For each $0.10 increase in price, 5 thousand sales are lost. How much should be char
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Question 463707: A magazine has a circulation of 140 thousand per month when they charge $2.50 for a magazine. For each $0.10 increase in price, 5 thousand sales are lost. How much should be charged per magazine to maximize revenue? Answer by robertb(5830) (Show Source):
You can put this solution on YOUR website! R(x) = (2.5 + 0.10x)(140 - 5x) =
revenue attains a maximum when .
Hence to maximize revenue each magazine should be priced at 2.5 + 0.10*1.5 = $2.65.
