Problema Solution
A wholesaler of appliances finds that she can sell (2378 − p) flat-panel television sets each week when the price is p dollars. What price will maximize revenue?
Answer provided by our tutors
The revenue 'R' can be calculated by the formula:
R = (2378 - p)*p
R = -p^2 + 2378p
We need to find the maximum the price p needed to maximize the revenue:
p max = -b/2a, where a = -1, b = 2378
p max = -2378/(2*(-1))
p max = $1,189
The price of $1,189 will maximize revenue.