Answer:
Explanation:
To find the price that maximizes the country's revenue, we need to consider the relationship between price, sales, and revenue.
Let's start by calculating the current revenue for the country:
Revenue = Price × Sales
Revenue = $80/barrel × 7 million barrels/day
Revenue = $560 million/day
Now let's consider the effect of a price increase on sales. According to the problem, a $1 increase in price will result in a decrease of 100,000 barrels/day in sales. This means that the new sales rate at a price of $81/barrel will be:
New sales = 7 million barrels/day - 100,000 barrels/day per $1 increase × (81 - 80)
New sales = 6.9 million barrels/day
The new revenue at a price of $81/barrel will be:
New revenue = $81/barrel × 6.9 million barrels/day
New revenue = $559.9 million/day
We can repeat this process for a range of prices to see how revenue changes:
Price Sales (million barrels/day) Revenue (million $/day)
80 7.0 560.0
81 6.9 559.9
82 6.8 544.0
83 6.7 534.1
84 6.6 528.0
85 6.5 520.0
From this table, we can see that the price that maximizes revenue is $84/barrel. At this price, the country will sell 6.6 million barrels/day, and generate revenue of $528 million/day.
Therefore, the price that will maximize the country's revenue is $84/barrel, and it will sell 6.6 million barrels/day at that price.