Question

A gift shop sells 140 wind chimes per month at $90 each. The owners estimate that for each $5 increase in price, they will sell 7 fewer wind chimes per month. Find the price per wind chime that will maximize revenue.

Answer 1

Answer: $95

Explanation:

Te new price will be 90 + 5x, if the price increases "x" times

The number of wind chimes sold per month will become 140 - 7x

`\begin{aligned}&\text {Revenue, } \mathrm{R}(\mathrm{x})=(90+5 \mathrm{x})(140-7 \mathrm{x}) \\&R^(\prime)(x)=5(140-7 x)-7(90+5 x) \\&R^(\prime)(x)=700-35 x-630-35 x \\&R^(\prime)(x)=70-70 x=0 \\&70 x=70 \\&x=1\end{aligned}`

Therefore, if the price becomes (90 + 5(1)) = $95 per wind chime, then the revenue will be maximum