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Derivative

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Derivatives, Second Derivatives and Profit Function - Lemonade Stand

A. Write a function for your profits for each price you charge. This is done by multiplying (P-.5) times your function (y= -100x + 250). I.e. if your function is Cups Sold = 1000 - 100P, your profit function would be (P - .5)*(1000 - 100P).

B. Calculate the first derivative of your profit function, and create another table with the price, profit, and value of the first derivative at the prices below. Can you tell what your profit maximizing price is from this table?

Price x Profit the derivative
0.25 -56.25 250
0.5 0 200
0.75 43.75 150
1 75 100
1.25 93.75 50
1.5 100 0
1.75 93.75 -50
2 75 -100
2.25 43.75 -150
2.5 0 -200

C. Calculate the second derivative, and also use the first derivative to find the profit maximizing price. What is the price, and what does the second derivative tell you?

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