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Sergio [31]
2 years ago
11

A car rental agency rents 220 cars per day at a rate of 28 dollars per day. For each 1 dollar increase in the daily rate, 6 fewe

r cars are rented. At what rate should the cars be rented to produce the maximum revenue, and what is the maximum revenue
Business
1 answer:
9966 [12]2 years ago
3 0

The cars should be rented at $34 per day for a maximum income of $6268 per day.

If the daily rental is increased by $x

<u>Then </u>

Rental: R(x)=(28+x)dollars per car-day

Number of cars rented:  

N(x) = (220−6x) and Income: I(x) = (28+x) (220−6x) = 6,610 + 52x−5x^{2} dollars/day.

The maximum will be achieved when the derivative of I (x) is zero.

\frac{dI(x)}{dx} = 52−10x = 0

⇒ x = 5.2

For an even dollar rental amount, and increase of $5/day or $6/day will generate the same income.

So

$28+$5 = $33/day

or

$28+$6 = $34/day

would both be valid answers.

However, $34/day involves renting fewer cars and thus reduced expenses.

Using basic substitution and arithmetic

I(4) = $6,268

<h3>What is Maximum revenue ?</h3>

Maximum revenue is defined as the total maximum amount of revenue of product or service can yield at maximum demand and price.

To calculate maximum revenue, determine the revenue function and then find its maximum value. Write a formula where p equals price and q equals demand, in the number of units.

Learn more about Maximum revenue  on:

brainly.com/question/13780508

#SPJ4

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Answer / Explanation

The question is incomplete as the options of answers were not given. Kindly kind the complete question with the answer options below.

If Hosne and Merve switch from each person dividing her time equally between the production of purses and wallets to each person spending all of her time producing the good in which she has a comparative advantage, then total production of purses will increase by

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Explanation:

To properly interpret this question, we will have to define some terms which includes:

Comparative Advantage: comparative advantage simply refers  to a country economy or a country economic ability to produce goods and services at a cost lower or lower opportunity cost than its counter parts or other country trade partners.  A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins.

If we refer back tot he question considering the effect of comparative advantage, the answer will be 3 out of the given options that complete the question.

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3 years ago
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Transfer payment is payment made or income received in which goods and services are not paid is known as transfer of payment. It is one-way payment. Transfer Payment is also known as Government transfer as it is given by the Government without goods and services being received in return. Transfer of payment is based on the concept of donor and recipient. A donor gives up something of value without receiving anything in return.

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