Question

The daily cost, in dollars, to produce

Answer 1

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Answer:

• f(x) = -0.15x^2 +19.8x -11 . . . profit function
• $642.40 maximum daily profit
• 66 gallons sold
• $10.90 per gallon

Step-by-step explanation:

Given:

  daily cost function c(x) = x +11

  price-demand function p(x) = -0.15x +20.8

Find:

  daily profit function

  maximum daily profit

  quantity sold for maximum profit

  price for maximum profit

Solution:

The revenue is the product of price and demand:

  x·p(x) = -0.15x^2 +20.8x

The profit is the difference between revenue and cost:

  f(x) = x·p(x) -c(x) = -0.15x^2 +20.8x -x -11

  f(x) = -0.15x^2 +19.8x -11 . . . . . daily profit function

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The maximum profit will be had a the vertex of the curve, found where ...

  x = -(19.8)/(2(-0.15)) = 66

  f(66) = (-0.15·66 +19.8)66 -11 = 9.9·66 -11 = 642.40

The maximum profit is $642.40, when 66 gallons of ice cream are sold.

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The price that will result in demand of 66 gallons of ice cream is ...

  p(66) = -0.15(66) +20.8 = 10.9

The price to charge per gallon to maximize profit is $10.90.