Real World Problems

Question

A food truck sells 90 hot dogs each day when it charges $2.00 per hot dog. For a $0.50 decrease in price, the food truck sells 15 more hot dogs.

a. How much should the food truck charge to maximize daily revenue?

b. What is the maximum daily revenue?

Answer 1

First, we should see how much money we'd make with each price.

$2.00/hotdog X 90 hotdogs = $180

($2.00 - $0.50)/hotdog X (90 + 15) hotdogs = $157.50

In order to maximize their daily revenue, the food truck should charge $2.00. Their maximum daily revenue would be $180.