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To produce espressos, a coffee shop has fixed costs of 200 dollars each day and variable costs of one dollar per espresso. The number of espressos that the coffee shop sells on a given day depends linearly on the price of each espresso: If the price is $1.00, then they sell 200 espressos, and if the price is $2.00, then they sell 100 espressos. What is the choice of price that will maximize their profit?

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Answer

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Explanation  

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First, figure out what the price of each espresso is in relation to the number of espressos the shop sells. $2 per expresso is the correct answer.

What is the best price option for them to maximize their profit?

[tex]\text{N} = -100 \text{ x }\text{P}+300\\\text{Profit} = \text{Revenue - Cost}\\\text{Profit} = \text{P} \text{ x } \text{N} - 200\\\text{Profit} = \text{P} \text{x} (-100 \text{ x } \text{P} +300)-200-(-100 \text{x} \text{P}+300) \\= -100 \text{ x } \text{P}^2+400\text{P}-500\\\text{P} = 2, \\\text{Profit} = -300\\[/tex]

The choice of the price will be $2/ coffee to maximize their profit.

For more information about costs and profit, refer below

https://brainly.com/question/16787230

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