Respuesta :
Answer:
I think it is $3.25
Step-by-step explanation:
140*3=420- original price with 140 sold each day
130*3.25=422.5- 10 less hotdogs sold with $0.25 price increase
110*3.75=412.5- 30 less hotdogs sold with $0.75 price increase
90*4.25=391.5- 50 less hotdogs sold with $1.25 price increase
60*5.75=345-80 less hotdogs sold with $2.75 price increase
The price maximizes the revenue is $3.75 .
What is revenue?
Revenue (sometimes referred to as sales revenue) is the amount of gross income produced through sales of products or services. A simple way to solve for revenue is by multiplying the number of sales and the sales price or average service price
Revenue = Sales x Average Price of Service or Sales Price.
According to the question
A hot dog vendor at a local fair averages 140 hot dogs per day
Price of hot dog = $3
By using formula of revenue
Revenue = Sales x Average Price of Service
Total revenue = 3*140
= $420 per day
Every increase in the price = $0.25
Hot dogs are sold on average = Average -10
Therefore,
1st time rise in price
If price increase and become =$3.25
Average sale of hot dog become = 130
By using formula of revenue
Revenue = Sales x Average Price of Service
Total revenue = 130*3.25
= $422.5
2nd time raise in price
New price = $3.75
Average sale of hot dog = 120
By using formula of revenue
Revenue = Sales x Average Price of Service
Total revenue = 3.75 * 120
= $450
3rd time raise in price
New price = $4
Average sale of hot dog = 110
By using formula of revenue
Revenue = Sales x Average Price of Service
Total revenue = 4* 110
= $440
4th time rise in price
New price = $4.25
Average sale of hot dog = 100
By using formula of revenue
Revenue = Sales x Average Price of Service
Total revenue = 4.25* 100
= $425
Now as we can see if we further increase the price the total revenue will decrease because our average sale of hot dog in also decreasing by 10 after every increase.
Hence ,the price maximizes the revenue is $3.75 .
To know more about revenue here:
https://brainly.com/question/13383966
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