0 like 0 dislike
You are the manager of a donut shop. Presently, you sell your donuts for $1.00 each and everyday you sell 500 donuts. However, you are wondering if you could make a bit more profit by raising the price slightly. Your marketing research shows that for every $0.05 you raise the price, you will sell 10 less donuts. What price would result in the most revenue?
by

1 Answer

0 like 0 dislike
$1.75

Solve for:

What price would result in the most revenue?

Step-by-step explanation:

Let the price of one donut = 1 + 0.05x

Let the # of donuts he can sell = 500 - 10x

Revenue,

[tex]R(x) = (1 + 0.05x)(500 - 10x)[/tex]

[tex]R(x) = 500 - 10x + 25x - 0.5x^2[/tex]

[tex]R(x) = -10 + 25-0.5(2x)[/tex]

[tex]= 15-x\\x=15[/tex]

Revenue is maxed when x = 15

When the revenue is maxed,

[tex]Price = 1 + 0.05(15)\\=1 + 0.75\\=1.75[/tex]

Therefore the best price for this scenario is $1.75
by
Welcome to AskTheTask.com, where understudies, educators and math devotees can ask and respond to any number related inquiry. Find support and replies to any numerical statement including variable based math, geometry, calculation, analytics, geometry, divisions, settling articulation, improving on articulations from there, the sky is the limit. Find solutions to numerical problems. Help is consistently 100 percent free!

Questions

No related questions found