A potter can sell 120 bowls per week at $4 per bowl. For each 50 cent decrease in price, 20 more bowls are sold. What price should be charged to maximize revenue?

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Answer 1 · 2018-08-06T08:43:23

#$3.5# for each bowl (for maximum profit)

Step by step evaluation:

#$4times120 = $480# at #$4# for each bowl.

#$3.5times140 =$490# at #$3.5# for each bowl.

#$3times160=$480# at #$3# for each bowl.

#$2.5times180 = $450# at #$2.5# for each bowl.

Maximum profit will be obtained at a price of #$3.5#.

Check:

What if one bowl is sold #$3.75#?

#$3.75times130 = $487.5# It is lower than the maximum profit.