Question2) The Canada Wide Car Rental Company finds that as they increase the price per kilometer, renters will drive shorter distances. The graph below represents data collected by market research.
(K: 3)
a) Use the graph to estimate the revenue if the price were
b) What price should Canada Wide charge to earn maximum revenue?
c) Consider the rate of change of revenue with respect to price. What are appropriate units for this rate of change?
Car Rental
Studdy Solution
STEP 1
1. The graph represents the relationship between price per kilometer and revenue.
2. The price is given in dollars per kilometer, and revenue is in dollars.
3. The peak of the graph indicates the maximum revenue point.
STEP 2
1. Estimate revenue at a specific price.
2. Identify the price for maximum revenue.
3. Determine appropriate units for the rate of change of revenue with respect to price.
STEP 3
Estimate the revenue if the price is 0.80 on the x-axis and find the corresponding y-value on the graph.
STEP 4
Identify the price that corresponds to the peak of the graph, which represents maximum revenue. From the description, the peak is around $0.50/km.
STEP 5
Consider the rate of change of revenue with respect to price. The rate of change is the derivative of revenue with respect to price, which has units of dollars per dollar/km, simplifying to just dollars/km.
Solution:
a) The estimated revenue at 0.50/km.
c) The appropriate units for the rate of change of revenue with respect to price are dollars/km.
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