Question

A bicycle manufacturing company knows that the equation R=-2.5p?+ 500 p models

the relationship between the price (p) and the revenue (R) for one of its product lines.
What is the maximum revenue possible?
$​

Answer 1

The maximum revenue is $25,000

Explanation:

The model equation is;

R = -2.5p^2 + 500p

To find the maximum value, we differentiate this and set result = 0

The first differential of this model equation is -5p + 500

we set this to zero to get the maximum price

5p = 500

p= 500/5

p = 100

Now to get the maximum revenue, we simply substitute the value of the maximum price

That would be -2.5(100)^2 + 500(100)

= -2.5(10,000) + 50,000

= 25,000 + 50,000

= 25,000