Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $170,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $52. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 - 6p, where p is the price of the e-book. (a) Build a spreadsheet model to calculate the profit/loss for a given demand. What is the demand? (b) Use Goal Seek to calculate the price that results in breakeven. If required, round your answer to two decimal places. (c) Use a data table that varies price from $50 to $400 in increments of $25 to find the price that maximizes profit. If Eastman sells the single-user access to the electronic book at a price of $ , it will earn a maximum profit of $
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $170,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $52. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 - 6p, where p is the price of the e-book. (a) Build a spreadsheet model to calculate the profit/loss for a given demand. What is the demand? (b) Use Goal Seek to calculate the price that results in breakeven. If required, round your answer to two decimal places. (c) Use a data table that varies price from $50 to $400 in increments of $25 to find the price that maximizes profit. If Eastman sells the single-user access to the electronic book at a price of $ , it will earn a maximum profit of $
Chapter7: Systems Of Equations And Inequalities
Section7.1: Systems Of Linear Equations: Two Variables
Problem 2SE: If you are performing a break-even analysis for a business and their cost and revenue equations are...
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Transcribed Image Text:Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed
cost of manuscript preparation, textbook design, and web-site construction is estimated to be $170,000. Variable processing costs
are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $52.
Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price.
The predictive model is demand = 4,000 - 6p, where p is the price of the e-book.
(a) Build a spreadsheet model to calculate the profit/loss for a given demand. What is the demand?
(b) Use Goal Seek to calculate the price that results in breakeven. If required, round your answer to two decimal places.
(c) Use a data table that varies price from $50 to $400 in increments of $25 to find the price that maximizes profit.
If Eastman sells the single-user access to the electronic book at a price of $
, it will earn a maximum profit of $
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