Question

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Andy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is considering mass-producing the dolls to sell in stores. He estimates that the initial investment for plant and equipment will be $25,000, while labor, materials, packaging, and shipping will be about $10 per doll. He has determined that sales volume is related to price, according to the following linear equation:

v=4,000−80 pv=4,000−80 p

Develop the nonlinear profit function for Andy, and determine the price that will maximize profit, the optimal volume, and the maximum profit per month.

Answer 1