Answer to Question #244418 in Financial Math for Katie

Question

BeachWear Inc. manufactures beach sandals. Their expense and revenue functions are E = -300p +32,000 and R=-275p^2+ 6,500p . Determine the profit function.

a. P = -275p^2 + 6,200p -32,000

b. P = -275p^2 +6,800p -32,000

c. P = -275p^2+6,500p -32,000

d. P = -275p^2 + 6,530p- 32,000

BeachWear Inc. manufactures beach sandals. Their expense and revenue functions are E = -300p +32,000 and R=-275p^2 + 6,500p . Determine the price, to the nearest cent, that yields the maximum profit.

a. $12.36 b. $11.82 c. $11.27 d. $11.87

Answer 1

profit=revenue-expense

$P=R-E$

Answer: b. P = -275p^2 +6,800p -32,000

$P'(p)=-550p+6800=0$

$p=6800/550=\$12.36$

Answer: a. $12.36