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Answer:
Maximum revenue = $8000
The price that will guarantee the maximum revenue is $40
Step-by-step explanation:
Given that:
Price of product = $35
Total sale of items = 225
For every dollar increase in the price, the number of items sold will decrease by 5.
The total cost of item sold = 225 ×35
The total cost of item sold = 7875
If c should be the dollar unit in price increment;
Therefore; the cost function is :
For maximum revenue;
0+225-35× 5 -10c = 0
225 - 175 =10c
50 = 10c
c = 50/10
c = 5
Maximum revenue =
Maximum revenue =
Maximum revenue = (35 + 5)(225-25)
Maximum revenue = (40 )(200)
Maximum revenue = $8000
The price that will guarantee the maximum revenue is :
=(35 +c)
= 35 + 5
= $40