How to maximize revenue

Question

A company makes desks and sells them at a local craft fair for $500 each. At this price, the company can sell 50 desks. They want to increase their revenue, so they increase the cost of the desks by $40, but each time they increase the cost 3 less people buy their desks.

Write and solve an equation to determine what the maximum revenue could be.

What price should they sell the desks for to maximize the price?

How many desks will they sell to reach this maximum revenue?

Answer 1

To start

x represents each increase in cost

R(x) = (50 - 3x)(500 + 40x)

Use this to answer the remaining questions.