Problema Solution
When priced at $30, a toy has monthly sales of 4000 units. For each &1 increase in price, sells will decrease by 100 units. Find the price that will maximize total revenue.
Answer provided by our tutors
The equation for price = 30 + x
Equation of the sales = 4000 - 100x
Total Monthly sales = (30 + x) (4000-100x) = 120000-3000x + 4000x -100x^2
Maximum occurs when the derivative of sales is zero
=> 1000 = 200x => x = 5
Hence price which will maximize the total revenue = 30 + x = $35