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Bas_tet [7]
3 years ago
5

The market research department of the Better Baby Buggy Co. predicts that the demand equation for its buggies is given by q = −0

.5p + 150 where q is the number of buggies it can sell in a month if the price is $p per buggy. At what price should it sell the buggies to get the largest revenue?
Business
1 answer:
Alex787 [66]3 years ago
3 0

Answer:

Price=150

Explanation:

Total revenue (TR) is given by Price \times Quantity. We can get the quantity from the demand equation. Then

TR= (150-0.5p)\times p=150p-0.5p^2

where p is the price. To find the maximum revenue we take derivatives with respect to the price and equalize it to zero

\frac{d}{dp}TR=150-p=0

solving for p we have that p=150

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0                          0                          0                               0

1                         10                         10                            $300

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3                         56                         20                            $600

4                         68                         12                            $360

5                         74                          6                            $180

6                         76                          2                             $60

7                         76                          0                                0

8                         74                         -2                            -$60

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