The price of a product affects a company's revenue in two conflicting ways. First, when the product has a higher price, the company's revenue per product is higher. Second, however, when the product has a higher price, fewer people can afford to purchase it.
Based on market research, a company finds that the following equation describes the relationship between x, the price of their product in dollars, and y, their annual revenue in millions of dollars.
y = -0.15x2 + 3.15x y
Based on this equation, what is the company's maximum revenue, and what price should they set for their product to obtain this revenue? (Answer choices are rounded appropriately.)
The maximum revenue is $10.50 million. The company will obtain this revenue by charging $16.54 per product.
The maximum revenue is $16.54 million. The company will obtain this revenue by charging $10.50 per product.
The maximum revenue is $0.15 million. The company will obtain this revenue by charging $3.15 per product.
The maximum revenue is $140.00 million. The company will obtain this revenue by charging $21.00 per product.
The maximum revenue is $3.15 million. The company will obtain this revenue by charging $0.15 per product.
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