Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. you have been hired as a marketing consultant to b

You have been hired as a marketing consultant to Big Book Publishing, Inc., and you...

80.2K

Verified Solution

Question

Accounting

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 $55.00 per book, the sales amount to 10,000 per year; when the price is set at $85.00 per book, the sales drop to 1000 per year. Use these data to calculate the demand equation. q = Correct: Your answer is correct.

(b) Now estimate the unit price that maximizes annual revenue. $ 44.17 Correct: Your answer is correct.

(c) Predict what Big Book Publishing, Inc.'s annual revenue will be at that price.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students