Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

First determine the linear relationship of the number of units sold per day, n, to the unit price, X, n(x)=a+bx, then maximize the profit function

image text in transcribed
image text in transcribed
First determine the linear relationship of the number of units sold per day, n, to the unit price, X, n(x)=a+bx, then maximize the profit function with respect to the unit price, x. Profit = total revenue -total cost -overhead. As a salesperson that sells 1,000 sodas a day for $3 each, once you raised the price to $4.00 each, the sale plummeted to 800 sodas a day. If there is a linear relationship between the price and the number of sodas sold, assume that there is a fixed cost (overhead) of $500 per day and the cost of each soda is $1.50. What would be the price of a soda for maximum profit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Technology Ventures From Idea To Enterprise

Authors: Thomas Byers

5th Edition

1260048497, 9781260048490

More Books

Students also viewed these Mathematics questions