The demand function (in Rs.) for a product is given by $P= 20 -0.25x$, where P is the price per unit and x is the number of units sold, then the price of one unit, when the revenue is maximized, is:

Rs.10

The correct answer is Option (2) → Rs.10

Given demand function: P = 20 - 0.25x

Revenue: R = $P \cdot x = (20 - 0.25x)x = 20x - 0.25x^2$

Maximize revenue by differentiating with respect to x:

$\frac{dR}{dx} = 20 - 0.5x = 0$

0.5x = 20

x = 40 units

Price per unit when revenue is maximum:

P = 20 - 0.25 × 40 = 20 - 10 = 10 Rs.