A bagel shop sells 400 bagels a day at a price of $2 per bagel. Market research shows that a decrease of price of $0.1 would increase sales by 10 bagels per day. Furthermore, a price increase would not be acceptable to the customers. Find the price at which the company should sell bagels in order to maximize its profit. Show all steps of the optimization task.

A bagel shop sells 400 bagels a day at a price of $2 per bagel. Market research shows that a decrease of price of $0.1 would increase sales by 10 bagels per day. Furthermore, a price increase would not be acceptable to the customers. Find the price at which the company should sell bagels in order to maximize its profit. Show all steps of the optimization task.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 1.1P

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