SOLUTION: Suppose that the price per unit in dollars of a cell phone production is modeled by p=$45-0.0125x, where x is in thousands of phones produced, and the revenue represented by thousa
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Question 1176178: Suppose that the price per unit in dollars of a cell phone production is modeled by p=$45-0.0125x, where x is in thousands of phones produced, and the revenue represented by thousands of dollars is R=x•p. Find the production level that will maximize revenue. Answer by ikleyn(52772) (Show Source):
The revenue is
R(x) = x*(45-0.0125x) dollars.
This formula represents a quadratic function, whose plot is a parabola opened downward.
It gets the maximum at the value of x which is exactly midway between the x-intersections.
The x-intersections are x= 0 and x= = 3200,
so the maximum of the function is at x= 1600,
To get the value of the maximum, substitute x= 1600 into the Revenue formula
= 1600*(45-0.0125*1600) = 40,000 thousand dollars. ANSWER
