Question

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

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 $49.00 per book, the sales amount to 10,000 per year; when the price is set at $79.00 per book, the sales drop to 1000 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.
$

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish...
You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize its weekly revenue. To make life as simple as possible, you assume that the demand equation for Johannesburg hamburgers has the linear form q = mp + b, where p is the price per hamburger, q is the demand in weekly sales, and m and b are certain constants you...
1. You have been hired by a new startup. They have been on the market for...
1. You have been hired by a new startup. They have been on the market for just a small time and in that time they have offered their product at two prices. They introduced their product at $3.50 and sold 40 units in a month. Then they reduced the price to $3.00 and sold 52 units in a month. The company has the following costs associated with production: 0.05Q² + 0.90Q. Fixed costs are $20 in rent. The government also...
Your underground used-book business is booming. Your policy is to sell all used versions of Calculus...
Your underground used-book business is booming. Your policy is to sell all used versions of Calculus and You at the same price (regardless of condition). When you set the price at $10, sales amounted to 120 volumes during the first week of classes. The following semester, you set the price at $30 and sales dropped to zero. Assuming that the demand for books depends linearly on the price, what price gives you the maximum revenue? $_____ per book What does...
You have been hired as an economic consultant for a ski company. This company has patented...
You have been hired as an economic consultant for a ski company. This company has patented a new type of ski, and is trying to figure out how to market the new product. Complicating this is the fact that consumer demand changes depending on the season. In this problem there are two seasons (summer and winter). Keep in mind that in the real world, this would be expanded to 4 quarters. You will need to figure out whether this product...
Suppose you have been hired as a consultant by a local real estate company in central...
Suppose you have been hired as a consultant by a local real estate company in central New Jersey. Your market research of real estate investments reveals the following sales figures for new homes of different prices over the past year. Price (Thousands of $) $150 - $169 $170 - $189 $190 - $209 $210 - $229 $230 - $249 $250 - $269 $270 - $289 Sales of New Homes This Year 126 103 82 75 82 40 20 If we...
Suppose that you have been hired as an economist by OPEC and given the following schedule...
Suppose that you have been hired as an economist by OPEC and given the following schedule showing the world demand for oil: Your advice is needed on the following Price($/barrel) Quantity demanded (millions of barrels/day) 10 60 20 50 30 40 40 30 50 20 questions: What is the elasticity of demand that maximizes total revenue? Over what range of prices is the demand for oil inelastic?
You are the manager of GetMoney Inc. and you produce cardboard boxes. Suppose that you hired...
You are the manager of GetMoney Inc. and you produce cardboard boxes. Suppose that you hired a consultant for your company to estimate the demand for your cardboard boxes. You collect data on the price and quantity of boxes sold and send it to your consultant, who then estimates the inverse demand equation as P = 14 – (1.5)*Q. Please also assume that you have a fixed cost of $2 and that the variable cost as estimated by your consultant...
You have been hired as a consultant by Aerospace Exploration, Inc.   (AEI).    AEI is publically traded...
You have been hired as a consultant by Aerospace Exploration, Inc.   (AEI).    AEI is publically traded company and a leader in space travel.   The company is looking to setup an outpost on the moon, where visitors can experience space living over a 2 week visit (including travel time).    AEI owns land which has a book value of $7.3 million and a market value of $7.5 million.   The following market data is available: Debt: 260,000; 6.1% semi-annual coupon bonds outstanding with...
You have recently been hired to improve the performance of Shortage Inc. which has been experiencing...
You have recently been hired to improve the performance of Shortage Inc. which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information, what is your estimate of the firm's current cash conversion cycle? Current inventory = $150,000 Accounts receivable = $220,000 Accounts payable = $140,000 Annual sales = $1,200,000 Cost of Goods Sold = $600,000 Purchases credit terms: net 30 days Receivables credit...
You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine...
You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $1,190,000 in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could sell the land for $1,400,000 on an aftertax basis. In four years, the land...