To generate a profit from its o'Books e-book service, OHaganBooks.com needs to know how the demand for novels depends on the price it charges. During the first month of the service, it was charging $10 per novel and sold 350. Lowering the price (p) to $5.50 per novel had the effect of increasing demand (q) to 620 novels per month. (a) Use the given data to construct a linear demand equation q(p) per month. q(p) = (b) Use the demand equation you constructed in part (a) to estimate the demand per month if the price were raised to $15 per novel. novels per month (c) Author royalties and copyright fees cost the company an average of $3 per novel, and the monthly cost of operating and maintaining the service amounts to $900 per month. Using this information, determine which of the three prices ($5.50, $10, and $15) would result in the largest profit, and the size of that profit. profit maximizing price $ maximum profit $
To generate a profit from its o'Books e-book service, OHaganBooks.com needs to know how the demand for novels depends on the price it charges. During the first month of the service, it was charging $10 per novel and sold 350. Lowering the price (p) to $5.50 per novel had the effect of increasing demand (q) to 620 novels per month. (a) Use the given data to construct a linear demand equation q(p) per month. q(p) = (b) Use the demand equation you constructed in part (a) to estimate the demand per month if the price were raised to $15 per novel. novels per month (c) Author royalties and copyright fees cost the company an average of $3 per novel, and the monthly cost of operating and maintaining the service amounts to $900 per month. Using this information, determine which of the three prices ($5.50, $10, and $15) would result in the largest profit, and the size of that profit. profit maximizing price $ maximum profit $
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:To generate a profit from its o'Books e-book service, OHaganBooks.com needs to know how the demand for novels depends on the price it charges.
During the first month of the service, it was charging $10 per novel and sold 350. Lowering the price (p) to $5.50 per novel had the effect of increasing
demand (q) to 620 novels per month.
(a) Use the given data to construct a linear demand equation q(p) per month.
q(p) =
(b) Use the demand equation you constructed in part (a) to estimate the demand per month if the price were raised to $15 per novel.
novels per month
(c) Author royalties and copyright fees cost the company an average of $3 per novel, and the monthly cost of operating and maintaining the service
amounts to $900 per month. Using this information, determine which of the three prices ($5.50, $10, and $15) would result in the largest profit,
and the size of that profit.
profit maximizing price $
maximum profit
$
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