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A company sells designer purses For $400 per purse. Usually, they sell 3000 purses per month. according to market research, they will sell 500 more purses for every 20$ reduction in price. write a function R(x) that models the company's revenue, where x is the number of price reductions. find the price that will generate the maximum revenue. find the maximum revenue.



Answer :

The price that would yield maximum revenue is $260  and maximum revenue is $1,690,000

What is the revenue function?

The fact that total revenue of  the company is the price per purse multiplied by the number of purses sold, means that the revenue modelled function is simply price multiplied by the quantity sold as shown below:

R(x)=P*x

R(x)=Px

R(3000)=$400*3,000

R(3000)=$1200,000

Note for every 500 more purses, the price reduces by $20

R(3500)=$380*3,500

R(3500)=$1,330,000

R(4000)=$360*4000

R(4000)=$1,440,000

R(4500)=$340*4500

R(4500)=$1,530,000

R(5000)=$320*5000

R(5000)=$1,600,000

R(5500)=$300*5500

R(5500)=$1,650,000

R(6000)=$280*6000

R(6000)=$1680,000

R(6500)=$260*6500

R(6500)=$1,690,000

R(7000)=$240*7000

R(7000)=$1,680,000

The total revenue fell at 7,000 purses, which means that the maximum revenue is $1,690,000 at 6500 purses

Find out more about revenue on:brainly.com/question/14305184

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