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1 November, 03:38

A manufacturer can produce a color pen at a cost of $3. the color pens have been selling for $5 per pen and at this price, consumers have been buying 4000 pens per month. the manufacturer is planning to raise the price of the pens and estimates that for each $1 increase in price, 400 fewer pens will be sold each month. at what price should the manufacturer sell the pen to maximize profit? what is the maximum profit?

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  1. 1 November, 04:01
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    Let x be the number of increases of $1 a month.

    Let y be the maximum profit.

    The profit before the price increases:

    $5-$3=$2

    The profit when increasing the price:

    y = (2+x x 1) (4000-400x)

    y = 8000-800x + 4000x - 400x2 (x2: x square)

    The vertex:

    x = - 3200 / (-400 x 2) = 4

    => y = 14400

    The price can maximize the profit is:

    p = 3 + 2 + 4x1 = 9

    The price can maximize the profit is $9

    The maximum profit is $14400.
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