Question

A sales team estimates that the number of new phones they will sell is a function of the price that they set. They estimate that if they set the price at x dollars, they will sell f(x)=1720−5x phones. Therefore, the company's revenue is x⋅(1720−5x). Find the price x which will maximize the company's revenue.

Answer 1

The revenue will be maximized when the price of the phone is $172

Let x represent the price of each phone and let f(x) represent the number of phones sold.

Revenue is the product of the price of an item and the number of items sold.

Therefore:

Revenue R(x) = x × f(x)

R(x) = x × (1720 - 5x)

R(x) = 1720x - 5x²

At maximum revenue, R'(x) = 0, hence:

R'(x) = 1720 - 10x

1720 - 10x = 0

10x = 1720

x = $172

The revenue will be maximized when the price of the phone is $172

Find out more at: https://brainly.com/question/16872607