Math CentralQuandaries & Queries


Question from lorraine, a student:

What price maximizes revenue? What price maximizes profit?

The only data i'm given is total output, total revenue, and total cost.
I'm not sure how to set up a formula

Total Output Total Revenue Total Cost
0 0 1,000
1 1,700 2,000
2 3,300 2,800
3 4,800 3,500
4 6,200 4,000
5 7,500 4,500
6 8,700 5,200
7 9,800 6,000
8 10,800 7,000
9 11,700 9,000

Hi Lorraine,

I would add two columns to the table. The profit column which is revenue minus cost. Notice that this in negative for low output, so in these cases you lose money.

The second column to add is revenue divided by the output. This will give you the price that price per item.


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