SOLUTION: Vinnie owns a t-shirt shop. He has determined that he can sell 150 t-shirts for $10 each. Vinnie's partner, Bob, is not happy with charging $10 for the shirts.
He tells Vinnie,
Question 1092694: Vinnie owns a t-shirt shop. He has determined that he can sell 150 t-shirts for $10 each. Vinnie's partner, Bob, is not happy with charging $10 for the shirts.
He tells Vinnie, "If we can increase the price by just one dollar we can make more money and maximize our revenue!" Vinnie responds, "But Bob, my research shows that each time we increase the price by one dollar, we will sell 5 less t-shirts! We will lose money!" Bob insists that they will make more money by charging more and selling fewer shirts.
Question:
What is the most Vinnie will make selling shirts? Answer by josmiceli(19441) (Show Source):
You can put this solution on YOUR website! [ income ] = [ cost/shirt ] x [ number of shirts sold ]
Let = number of $1 increases in price
-----------------------------
The value of that makes a maximum
is given by the formula:
If the price is raised $10 ( 10 $1 increases ), then
income is maximum
--------------------
Here's the plot:
