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On a site, I read a word problem:

A company charges 1.25 per ride and currently averages 10000 riders per day. The company needs to increase revenue, but found that each $.10 increase in fare results in a loss of 500 riders. What should company charge to maximize revenue?

The equation should read (10,000-500x)(1.25 + .10x). Maximizing this function occurs when x = 3.75.

However, the site says the answer is .75. Typo? http://pdfs.cpm.org/state_supplements/Optimization_Problems.pdf

user342258
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  • You've missed dimensions. Think in cents. – Michael Hoppe May 25 '16 at 16:42
  • Yes, I agree with your answer, although expressing it as 3.75 when you mean 37.5 cents or 0.375 dollars is confusing. Incidentally, I don't see how you make a half-cent fare. So you need to increase to 1.62 or 1.63. The site's solution is double this increase. Looks like a typo. – almagest May 25 '16 at 16:44

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