Question

The sticker warehouse sells rolls of stickers for $4.00 each. the average custiomer buys six rolls of stickers. the owner finds that for every $0.25 decrease in price , the average customer buys an additional roll.

a) with how many price reductions will the revenue per customer be $30?
b) what is the maximum predicted sales revenue per customer? with how many price reductions will this occur?

Answer 1

A) 4 price reductions. B) The maximum predicted sales revenue per customer is $30.25 which occurs with 5 price reductions. As a matter of interest, the $30 revenue per customer also occurs with 6 price reductions but this happens after reaching the maximum predicted revenue per customer of $30.25.

Answer 2

The sticker warehouse sells rolls of stickers for $4.00 each.

The average customer buys six rolls of stickers.

The owner finds that for every $0.25 decrease in price , the average customer buys an additional roll.

A:

We can find this by decreasing the price by $0.25, then multiply the number of rolls by the price, till we get $30.

`6*4=24`

`7*3.75=26.25`

`8*3.50=28`

`9*3.25=29.25`

`10*3=30`

We can see that there will be 4 price reductions.

B:

`11*2.75 =30.25`

`12*2.50 =30`

Here we can see that the sale revenue per customer is going down, so the answer is the highest value before this, which is $30.25. And there will be 6 reductions.