Kristin owns a bakery called Kristin's Cakes n' Such and is considering lowering the price of her cakes. Kristin polls her customers and determines that she can sell 100 cakes each week when she charges $25 each. She also discovers that for every $1 decrease in the price of the cake, she will sell 5 more cakes. The graph below represents Kristin's projected weekly revenue for each decrease in price.

Question

Kristin owns a bakery called Kristin's Cakes n' Such and is considering lowering the price of her cakes. Kristin polls her customers and determines that she can sell 100 cakes each week when she charges $25 each. She also discovers that for every $1 decrease in the price of the cake, she will sell 5 more cakes. The graph below represents Kristin's projected weekly revenue for each decrease in price.

2800
2600 (2.5, 2531.25)
2400
2200
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Revenue (in dollars)
10
20
(25, 0)
30
40
Decrease in Price (in dollars)

Answer 1

Based on the graph and the information given, Kristin's optimal price for her cakes would be $20. At this price, she would sell 125 cakes and make $2500 in weekly revenue. This is the highest revenue she can achieve based on the data provided.