Maria makes tortillas and sells them from her house. She is concerned about purchasing too many ingredients and having to throw away unsold tortillas at the end of the day. It costs her $5.00 to make 100 tortillas and she sells them for $20.00 per 100. She has kept track of sales and discovered that she can sell 1,500 tortillas about 25% of the time, 1,000 tortillas about 50% of the time and only 500 tortillas the rest of the time. What is the minimum number of tortillas she should make daily to maximize profit? Round to the nearest 100 tortillas.

Hint: She cannot sell more than she makes, so if she makes 500 she has a 100% probability of selling them all, If she makes 600, she is likely to sell 575 (500 x 25% + 600 x 50% + 600 x 25%) Calculate the profit at each level and you can work out how many she should make.

Revenue $20.00 per 100

Variable Cost $5.00 per 100

please calculate at each level based on the information above

Quantity Produced 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 Estimated total sales

Quantity

Sales

Total Variable Costs

Profit