An Indian airline charges ₹5000 for a ticket. For every ₹100 increase in price, 2 fewer passengers travel. If 200 passengers travel at ₹5000, what ticket price maximizes revenue?
An Indian airline charges ₹5000 for a ticket. For every ₹100 increase in price, 2 fewer passengers travel. If 200 passengers travel at ₹5000, what ticket price maximizes revenue?
- A. ₹7500
- B. ₹6000
- C. ₹8000
- D. ₹5000
Answer: A) ₹7500
Explanation: Let price increase by 100x. Price = 5000 + 100x. Passengers = 200 - 2x. Revenue R(x) = (5000 + 100x)(200 - 2x). R'(x) = 0 gives x = 25. Optimal Price = 5000 + 100(25) = ₹7500.
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