100k views
3 votes
Demand for an electric fan is related to its selling price p (in dollars) by the equation n = 3680 − 80 p where n is the number of fans that can be sold per month at a price p . Find the selling price that will maximize the revenue.

1 Answer

3 votes

Answer:

The price of $23 will maximize the total revenue.

Step-by-step explanation:

Revenue is a function of price multiplied by quantity. Thus, the equation for revenue is,

Let p be the price.

Revenue = (3680 - 80p) * p

Revenue = 3680p - 80p²

To find the price that will maximize the revenue, we need to take the derivative of this equation as derivative tell us about change.

Taking derivative,

d/dp = 1 * 3680 - 2 * 80p

0 = 3680 - 160p

160p = 3680

p = 3680 / 160

p = 23

So, at price p=$23, the total revenue will be maximized.

User Francesco Laurita
by
8.6k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories