Question
Suppose that at a price of 7 , SweetShop sells 55 cupcakes. When they lower the price to 3 , the quantity of cupcakes sold rises to 69 . At quantity of 55 , SweetShop's total revenue is \( \$ \)
Ask by Rowe Sullivan. in the United States
Feb 26,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The total revenue at a quantity of 55 cupcakes is \$385.
Solution
To find the total revenue at a quantity of 55 cupcakes, we need to calculate the revenue at the price of 7 and then multiply it by the quantity of 55 cupcakes.
Given:
- Price at which 55 cupcakes are sold: 7
- Quantity of cupcakes sold at a price of 3: 69
Let's denote the total revenue at a quantity of 55 cupcakes as \( R \).
The total revenue is calculated as the product of the price and the quantity sold. Therefore, the total revenue at a quantity of 55 cupcakes is:
\[ R = 7 \times 55 \]
Now, let's calculate the total revenue at a quantity of 55 cupcakes.
Calculate the value by following steps:
- step0: Calculate:
\(7\times 55\)
- step1: Multiply the numbers:
\(385\)
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Simplify this solution Extra Insights
At a price of 7, the total revenue from selling 55 cupcakes is calculated by multiplying the price by the quantity sold. So, \( 7 \times 55 = 385 \). This means SweetShop brings in a total revenue of $385 when they sell those 55 delicious cupcakes. When it comes to pricing strategies, understanding the elasticity of demand is crucial. In this case, lowering the price from 7 to 3 and seeing a rise in sales indicates that the demand for cupcakes is elastic—customers are eager to grab more at lower prices! SweetShop can use this information to optimize pricing and maximize revenue, balancing between quantity sold and price.
