Question

9: -3 points WaneFMAC6 12.6.016. 0/6 Submissions Used My Notes You have been hired as a marketing consultant to Big Book Publishing, Inc., and you have been approached determine the best selling price for the hit calculus text by Whiner and Istanbul entitled Fun with Denvatives. 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 $51.00 per book, the sales amount to 10,000 per year; when the price set at $81.00 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. annual revenue will be at that price Predict what Big Book Publishing, Inc.' Need Help? Read It Talk to a Tutor Submit Answer Save Progress O -12 points WaneFMAC6 12.6.007. 0/6 Submissions Used 7. My Notes A study of about 1,800 U.S. colleges and universities resulted in the demand equation q 9,600- 2.4p, where fees) it charges is the enrollment a college or university, andp is the average annual tuition (plus (a) The study also found that the average tuition charged by universities and colleges was $3,000. What is the corresponding price elasticity of demand? (Round your answers to two decimal places.) inelastic? Is the price elastic o elastic inelastic Should colleges charge more less on average to maximize revenue? more less (b) Based on the study, what would you advise a college to charge its students in order to maximize total revenue? S per student What would the revenue be? Need Help? Read It Talk to a Tutor

Answer 1

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