Given that for each <span>$2 increase in price, the demand is less and 4 fewer cars are rented.
Let x be the number of $2 increases in price, then the revenue from renting cars is given by
.
Also, given that f</span><span>or each car that is rented, there are routine maintenance costs of $5 per day, then the total cost of renting cars is given by
Profit is given by revenue - cost.
Thus, the profit from renting cars is given by
</span><span>
For maximum profit, the differentiation of the profit function equals zero.
i.e.
</span><span>
The price of renting a car is given by 48 + 2x = 48 + 2(8) = 48 + 16 = 64.
Therefore, the </span><span>rental charge will maximize profit is $64.</span>
Let x be the number of $2 increases in price, then the revenue from renting cars is given by
Also, given that f</span><span>or each car that is rented, there are routine maintenance costs of $5 per day, then the total cost of renting cars is given by
Profit is given by revenue - cost.
Thus, the profit from renting cars is given by
</span><span>
For maximum profit, the differentiation of the profit function equals zero.
i.e.
</span><span>
The price of renting a car is given by 48 + 2x = 48 + 2(8) = 48 + 16 = 64.
Therefore, the </span><span>rental charge will maximize profit is $64.</span>