You operate a bakery. You buy cakes from a supplier who charges you $5 per cake.
Government regulations dictate that you can only charge a price between $10 and $20
per cake. Your research shows that if you were to charge $x per cake, you would sell
125 - x2 cakes per week.
a) In order to maximize profi�t, what price should you sell the cake for?
b) How much would you charge if there were no government regulations?
1 answer