
Marion J. answered 04/06/22
Qualified teacher who loves all types of Math
Revenue = fare x number of riders
New fare will be = 20 + 0.5x (current fare of $20 plus x increments of $0.05)
Number of riders will then be = 10,000 - 200x (current number subtract 200 for each increment of x)
New revenue (R) = (20 + 0.5x)(10,000 - 200x)
R = -100x2 + 1,000x + 200,000
Differentiate to find x-coordinate of maximum:
dR/dx = -200x + 1,000
-200x + 1,000 = 0
-200x = -1,000
x = 5
This gives a new fare of 20 + 0.5(5) = $22.50
And a maximum revenue of -100(5)2 + 1,000(5) + 200,000 = $202,500