Answer:
$22.5.
Explanation:
The total revenue that is gained from the sales of the cakes is determined by multiplying the number of cakes by the price. If we let x be the number of $1 that should be deducted from the price and y be the total revenue,
y = (25 - x)(100 + 5x)
Simplifying,
y = 2500 + 25x - 5x²
We get the value of x that will give us the maximum revenue by differentiating the equation and equating the differential to zero.
dy/dx = 0 = 25 - 10x