How Many Empty Seats Maximize Profit on a Ski Trip Minibus?

Click For Summary
SUMMARY

The optimal number of empty seats on a ski trip minibus to maximize profit is 8. The cost function is defined as C(x) = 225 + 30x, while the revenue function is R(x) = (60 + 5(22 - x))x, where x represents the number of passengers. The profit function is derived from P(x) = R(x) - C(x). Correctly formulating the revenue function by adding $5 for each empty seat is crucial for reaching the conclusion that 8 empty seats yield maximum profit.

PREREQUISITES
  • Understanding of cost functions in economics
  • Knowledge of revenue and profit functions
  • Familiarity with algebraic manipulation of equations
  • Concept of maximizing functions using vertex form
NEXT STEPS
  • Study the derivation of cost functions in business scenarios
  • Learn about maximizing profit using calculus techniques
  • Explore the application of vertex form in quadratic equations
  • Investigate the impact of pricing strategies on revenue generation
USEFUL FOR

Economics students, business analysts, and anyone involved in pricing strategy and profit maximization in transportation or service industries.

hallowon
Messages
35
Reaction score
0

Homework Statement


It Costs a bus company $225 to run a minibus on a ski trip, plus $30 per passenger. the bus has seating for 22 passengers, and the company charges $60 per fare if the bus is full. For each empty seat, the company has to increase ticket price by $5. How many empty seats should the bus run with to maximize profit from this trip?


Homework Equations


vertex form
factored form
standardform
cost function
revenue function
profit function

The back of the book says 8 empty seats

The Attempt at a Solution


my equations
C(x)=(225+30x)
R(x)=(60-5x)
P(x)=R(x)-C(x)
So far I've tried doing the equations numerus ways, I've tried multiplying the terms together, doesn't work I think it gave me 3 empty seats. Tried using the profit functions above, still doesn't give me 8 empty seats. I'm guessing it is either one of my functions that is incorrect but I am not sure which
 
Last edited:
Physics news on Phys.org
You formulated the Rate ( R(x) ) incorrectly. View the passenger rate as Dollars Per Passenger. The company charges 60 dollars per fare if bus is full, or bus takes 22 passengers. How much money is that? 60 dollars per fare multiplied by 22 fares. Now, what happens for each decrement of 1 passenger? This is where you became stuck(?).
Why did you subtract instead of add? Best I could tell, you want R(x)=60+5x, because "increase ticket price by $5 for each empty seat". x=[count of passengers]
 

Similar threads

Replies
2
Views
7K
Replies
10
Views
3K
  • · Replies 25 ·
Replies
25
Views
4K
Replies
3
Views
4K