Posted by **Rob** on Wednesday, March 7, 2007 at 11:25am.

An agency charges $15 per person for a trip for groups of no less than 30 people. But for each person above the 30, the charge (for everyone!) will be reduced by $0.15. Write a revenue function for the agency usin x as number of people above 30. What size group will maximize the total revenue for the agency if the trip is limited to at most 50 people?

I will be happy to critique your thinking.

- Calc Help -
**Ed**, Wednesday, July 11, 2012 at 8:41pm
Since the agency only takes groups of no less than 30 people, the minimum profit for a single trip is $15*30 people.

Let x be the number of people above 30.

The number of people is then 30+x.

The [Total Revenue] is equal to the

[price charged for each person] times the [number of people]

[price charged for each]=$15-.15*x

Notice if x=0, then the price charged is equal to $15 and the number of people in group is 30, which is the minum group size the company will allow for a trip.

Thus our Total Revenue Function is

[Total Revenue] =

[price charged for each person]*[number of people]

=($15-$.15*x)*(30+x)

R(x)= ($15-$.15*x)*(30+x)=450+10.5x-.15*x^2 after foiling everything out.

R'(x)=10.5-2*.15*x is the derivative of the Revenue function and the Revenue will be maximized at a value of x for which R'(x)=0.

Setting R'(x)=0 implies 10.5-2*.15*x=0, which implies that x=35 people. The group size was constrained to be at least 30 people and at most 50 people, and since the number 35 is between 30 and 50, then a group size of 35 people is a valid solution for this problem: according to the revenue function R(x),and the constraints on groups sizes given above above, the company will maximize its profit when it has groups of size 35. Now I must go breath.

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