Answer:
- $30 rental with $720 revenue per day
Step-by-step explanation:
28 kayaks rented each for $25 per day.
Each $5 increase in price results in loss of 4 rentals.
It is:
- 4/5 = 0.8 rentals loss per $1 increase
The revenue is:
- R = P*N, where P - rental price, N- number of kayaks rented
Let the change be x, then the revenue is:
- R = (25 + x)(28 - 0.8x) = 700 + 8x - 0.8x²
This is a quadratic function. It has its maximum at vertex, which is determined as x = - b/2a.
The vertex is:
The maximum revenue at this value is:
- R = (25 + 5)(28 - 4) = 30*24 = 720
