Question

A food truck sells 90 hot dogs each day when it charges $2.00 per hot dog. For a $0.50 decrease in price, the food truck sells 15 more hot dogs. a. How much should the food truck charge to maximize daily revenue? The food truck should charge $ per hot dog. b. What is the maximum daily revenue? The maximum daily revenue is $ .

Answer 1

Answer:

The food truck should charge $2 to maximize revenue.

The maximum daily revenue at this price is $180.

Explanation:

A food truck sells 90 hot dogs each day when it charges $2.00 per hot dog.

For a $0.50 decrease in price, the food truck sells 15 more hot dogs.

Daily revenue at price $2

= $Price\ \times\ Quantity$

= $\ 2\ \times\ 90$

= $180

Daily revenue at price $1.5

= $Price\ \times\ Quantity$

= $\ 1.5\ \times\ 105$

= $157.5

So, the food truck should charge $2 to maximize revenue.

The maximum daily revenue at this price is $180.