Question

As Sales Manager for Montevideo Productions, Inc., you are planning to review the prices you charge clients for television advertisement development. You currently charge each client an hourly development fee of $2,600. With this pricing structure, the demand, measured by the number of contracts Montevideo signs per month, is 4 contracts. This is down 5contracts from the figure last year, when your company charged only $2,100.

(a) Construct a linear demand equation giving the number of contracts q as a function of the hourly fee pMontevideo charges for development.

q(p) =

(b) On average, Montevideo bills for 50 hours of production time on each contract. Give a formula for the total revenue obtained by charging $p per hour.

R(p) =

(c) The costs to Montevideo Productions are estimated as follows:

Fixed costs:	$150,000 per month
Variable costs:	$80,000 per contract

Express Montevideo Productions' monthly cost as a function of the number q of contracts.

C(q) =

Express Montevideo Productions' monthly cost as a function of the hourly production charge p.

C(p) =

(d) Express Montevideo Productions' monthly profit as a function of the hourly development fee p.

P(p) =

Find the price it should charge to maximize the profit.
p = $ __________per hour

Answer 1

Please change the values the concept is correct.,

As Saes Manager for Mentevideo Prockucrions, Inc. you are planningto review the prices you chage dients for television advertisement development. You cumenty charge each dlient an hourly cevelopment tee ot $2,800, with thia pricing strucoure, the demand measured by the number of contracts Monteideo signs per month, is 12 conracts. This is down8contracts trom the fgure last year, whan your company charged only $2,000 (a) Construct a Iinear dem and equadon giving the number of contracts q as a funcion ot the hourty fee p Ila tevideo darges tr development. tee = 2 800 2800 2 D) On average Monmevideo biis for 40 hours of production time on each contract, Give a fomula for the totail revenue ebtained by charging Sp per hour The costs to Montevideo Productons are estimated as folos: 12 20- P- 28o Expreas Montevideo Productiongt monthly coat as a funcion of e number gof contracta 2-12 8 24-280.) -800 IOD Revenue yo . 오 Mancevicec Productians' monthiy prott as a function of the hourly developmem fee p.