Question
A ferry operator takes tourists to an island. The operator carries an average of 500 people per day for a round-trip fare of $20. The operator estimates that for each$1 increase in fare, 20 fewer people will take the trip. What fare will maximize the number of people taking the ferry?
Solution
VerifiedStep 1
1 of 2Let be the number of increase in fare. So, the fare is represented by and the number of people taking the ferry is .
The revenue is the product of number of people taking the ferry and the fare:
Write in form:
The maximum revenue occurs at the vertex which has an -coordinate of , Here, and so:
So, the fare that will maximize the number of people taking the ferry is:
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