Teresa's taco truck currently sells 2,500 tacos per day, for $6 each. Teresa estimates that, for each $1 she Increases the price of a taco, she will sell 300 less tacos per day (fewer people will want to buy if the price Increases). 1. How much money does Teresa currently make (total) per day? 2. How much revenue would she make if she Increased the price of a taco to $7 and she sold 300 fewer tacos? 3. Find a function that gives the quantity sold in terms of the price. (Hint, find two points and then find the linear equation between them.) 4. Find a function that models Teresa's revenue per day in terms of the price of a taco. (Hint: Revenue=quantity times price.) 5. Find the taco price and total revenue that maximizes revenue per day from taco sales. Round your answer(s) to the nearest cent.

Teresa's taco truck currently sells 2,500 tacos per day, for $6 each. Teresa estimates that, for each $1 she Increases the price of a taco, she will sell 300 less tacos per day (fewer people will want to buy if the price Increases). 1. How much money does Teresa currently make (total) per day? 2. How much revenue would she make if she Increased the price of a taco to $7 and she sold 300 fewer tacos? 3. Find a function that gives the quantity sold in terms of the price. (Hint, find two points and then find the linear equation between them.) 4. Find a function that models Teresa's revenue per day in terms of the price of a taco. (Hint: Revenue=quantity times price.) 5. Find the taco price and total revenue that maximizes revenue per day from taco sales. Round your answer(s) to the nearest cent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

**Teresa's Taco Truck Problem**

Teresa's taco truck currently sells 2,500 tacos per day at $6 each. Teresa estimates that for each $1 increase in the price of a taco, she will sell 300 fewer tacos per day (fewer people will want to buy if the price increases).

1. **How much money does Teresa currently make (total) per day?**

2. **How much revenue would she make if she increased the price of a taco to $7 and she sold 300 fewer tacos?**

3. **Find a function that gives the quantity sold in terms of the price.**
*(Hint: find two points and then find the linear equation between them.)*

4. **Find a function that models Teresa’s revenue per day in terms of the price of a taco.**
*(Hint: Revenue = quantity times price.)*

5. **Find the taco price and total revenue that maximizes revenue per day from taco sales. Round your answer(s) to the nearest cent.**

This problem challenges the student to understand concepts of revenue, demand elasticity, and optimization. Analyze strategies for pricing and their impact on sales.

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