Question

Calculators are sold to students for $20 each. 300 students are willing to buy them for that price. For each five dollars increase in price, there are 30 fewer students that are willing to buy the calculator.

a. what selling price will produce the maximum revenue?

b. what will the maximum revenue be?

Answer 1

a) 40$ b) 7600

Explanation:

In my opinion, the best way to go about this is to simply start by doing 20×300, 25×270, 30×240, etc. Once I reached 40, I realized that my revenue was going down after it, so I saw that a 40 dollar starting price would being in more money. 40×190 - (the amount of students who will buy at that price) equals 7600, which will be your maximum revenue. I hope i could help, good luck.