Determine the profit function and maximum revenue

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Reference no: EM131103686

Suppose the bakery determines that the demand for its muffins has changed. The shop can now sell 300 muffins at 85 cents each. IF the price is reduced to 75 cents, the shop can sell 350 muffins. The total cost function is still C(x) = 0.24x + 122, where x is the number of muffins produced.

a) Assuming that the demand function is linear, determine an equation for p= D(x), where p is the price in dollars and x is the number of muffins.

b) Graph both cost and revenue on the same set of axes.

c) Algebraically determine the break-even point(s).

d) How many muffins must be sold to maximize revenue? Determine the maximum revenue . Locate that spot on your graph. At what price must the muffins be sold to maximize revenue.

e) Determine the profit function.

f) Determine the maximum profit. Locate that spot on your graph. How many muffins will be sold? At what price must the muffins be sold to maximize profit?

Reference no: EM131103686

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