
To calculate: The amount that shop must charge per surfboard to maximize the amount of money earned and the maximum amount that the shop can earn per month.

Answer to Problem 8CT
The shop should charge $450 per surfboard to maximize the amount of money earned.
The maximum amount the shop can earn per month is $20,250 .
Explanation of Solution
Given information: Shop sells 40 surfboards per month when it charges $500 per surfboard. When price decreases by $10 , it sells 1 additional surfboard per month.
Concept Used: The
Calculation:
Let x be the number of surfboards sold.
The number of surfboards sold per month are given by (40+x) when price is $(500−10x)
Hence, the profit function is given by:
P=(40+x)(500−10x)=>P=−10x2+100x+20000
Comparing with general equation we get;
a=−10,b=100,c=20000
The maximum of this occurs at x=−b2a=−100−2.10=5
Substitute this value in profit function:
P=−10(52)+100(5)+20000=>P=−250+500+20000=>P=20,250
The maximum amount that the shop can earn per month is $20,250
The shop can charge $(500−10.5)=$(500−50)=$450 per surfboard.
Chapter 2 Solutions
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