You have been hired as a marketing consultant to Big Book Publishing, Inc., and you have been approached to determine the best-selling price for the hit calculus text by Whiner and Istanbul entitled Fun with Derivatives. You decide to make life easy and assume that the demand equation for Fun with Derivatives has the linear form q = mp + b, where p is the price per book, q is the demand in annual sales, and m and b are certain constants you must determine. (a) Your market studies reveal the following sales figures: when the price is set at $54.00 per book, the sales amount to 10,000 per year; when the price is set at $78.00 per book, the sales drop to 1,000 per year. Use these data to calculate the demand equation. q = (b) Now, estimate the unit price that maximizes annual revenue. %24 Predict what Big Book Publishing, Inc.'s annual revenue will be at that price.

Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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You have been hired as a marketing consultant to Big Book Publishing, Inc., and you have been approached to determine the best-selling price for the hit calculus text by Whiner and Istanbul entitled Fun with Derivatives. You decide to
make life easy and assume that the demand equation for Fun with Derivatives has the linear form q = mp + b, where p is the price per book, q is the demand in annual sales, and m and b are certain constants you must determine.
(a) Your market studies reveal the following sales figures: when the price is set at $54.00 per book, the sales amount to 10,000 per year; when the price is set at $78.00 per book, the sales drop to 1,000 per year. Use these data to
calculate the demand equation.
q =
(b) Now, estimate the unit price that maximizes annual revenue.
$
Predict what Big Book Publishing, Inc.'s annual revenue will be at that price.
$
Transcribed Image Text:You have been hired as a marketing consultant to Big Book Publishing, Inc., and you have been approached to determine the best-selling price for the hit calculus text by Whiner and Istanbul entitled Fun with Derivatives. You decide to make life easy and assume that the demand equation for Fun with Derivatives has the linear form q = mp + b, where p is the price per book, q is the demand in annual sales, and m and b are certain constants you must determine. (a) Your market studies reveal the following sales figures: when the price is set at $54.00 per book, the sales amount to 10,000 per year; when the price is set at $78.00 per book, the sales drop to 1,000 per year. Use these data to calculate the demand equation. q = (b) Now, estimate the unit price that maximizes annual revenue. $ Predict what Big Book Publishing, Inc.'s annual revenue will be at that price. $
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