The revenue function when the assumed values and parameters are used is F(x) = (60 + 8x)(250 - 30x)
The assumed values
- Ticket price = $60 per ticket
- People = 250
- Increase in price = 8
- Decrease in people = 30
The revenue function
Let the number of people be x, and the revenue function be F(x).
Using the assumed values, the revenue function is:
F(x) = (60 + 8x)(250 - 30x)
The maximum funds
We have:
F(x) = (60 + 8x)(250 - 30x)
Expand
F(x) = 15000 - 1800x + 2000x - 240x²
Differentiate the function
F'(x) = -1800 + 2000 - 480x
Evaluate
F'(x) = 200 - 480x
Set to 0
200 - 480x = 0
This gives
480x = 200
Divide both sides by 480
x = 0.42
Substitute x = 0.42 in F(x)
F(x) = (60 + 8 * 0.42)(300 - 30* 0.42)
Evaluate
F(x) = 18210
Hence, the maximum revenue is $18210, at a rate of $0.42 per person.
Would they raise $5000?
We start by setting F(x) to 5000.
So, we have:
15000 - 1800x + 2000x - 240x² = 5000
Evaluate the like terms
10000 + 200x - 240x² = 0
Using a graphing tool, we have:
x = 6.89
Hence, they would reach their goal at a rate of $6.89 per ticket.
The cost function
We have:
People = x
Cost per person = 20
So, the cost function is:
C(x) = 20x
The profit function
Profit is calculated using:
P(x) = F(x) - C(x)
So, we have:
P(x) = 15000 - 1800x + 2000x - 240x² - 20x
Evaluate
P(x) = 15000 + 180x - 240x²
The break even price
This is the point where P(x) = 0.
So, we have:
15000 + 180x - 240x² = 0
Using a graphing tool, we have:
x = 8.29
Hence, the break even price is $8.29
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