Business Calculus Optimization Example

A company makes wrenches. It costs them an initial \$10,000 to set up and an additional \$5.00 for each wrench. A market study indicates that if the price of a wrench is \$5.00 then the company will sell 200,000 wrenches. However, for every \$10 that the company raises the price per wrench, only half as many people will buy the wrench. What price should they charge per wrench to maximize the companies profits.