Another company sells wrought iron umbrella trees. This company has fixed costs of $100,000/month. The cost in labor and material is $15 per umbrella sold per month. To sell x items, the price must be set at $50-0.3x, where x is in thousands of umbrellas sold per month. What price will maximize profit?
price=_______________
Calculus problem:?
price = $32.50
Reply:Cost = 100,000 +15x
Revenue = (50- .3x)x
Profit = (50-.3x)x - 100000+15x
P = 50x-.3x^2 -100000+15x
P = -.3x^2 +50x -100000
dP/dx = -.6x +50
.6x+ 50
x = 50/.6 = 83.3
Price = 50- 83.33*.3 = 25$
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment