"Does that mean just set the dy/dr equal to zero and work out x and r?"
yes, or dy/dx, as the constraint on the perimeter allows you to eliminate one of these variables and find the area as a single variable function, so you might have the function y=A(r), and by setting A'(r) = 0 you maximise the area. Sometimes you need to show that A''(r)<0 to prove the point is a maximum and not a minimum or poi.
drawing the graph should be simple, except the questions seems a bit stupid bcause of its ambiguity, just sketch y=A(r).