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A bicycle company is manufacturing a new bicycle and trying to decide on a price that will maximizing their profit. the graph below represents profit (P), in thousands of dollars,generated by the price of each bike (x), in hundreds of dollarsIf the company wants to make a maximum profit,what should the price of the bicycle be?

A bicycle company is manufacturing a new bicycle and trying to decide on a price that-example-1
User Avigil
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1 Answer

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The graph shows the profit (measured in thousands of dollars) on the y-axis and the price per bike (measured in hundreds of dollars) on the x-axis, the parabola describes the relationship between both variables.

As you can see the parabola opens downwards, which means that the maximum value of the relationship is determined by the vertex of the curve.

The coordinates of the vertex indicate the value of the bikes (x-coordinate) that allows the company to make the maximum profit (y-coordinate)

Looking at the graph the coordinates for the vertex are, approximately, (6, 160)

x-coordinate: 6 hundreds of dollars

y-coordinate 160 thousands of dollars

The maximum profit will be $160,000, and they will reach it when the bicycles cost $600

User Yohan Obadia
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