Revenue and Profit Some time ago, a consultant formulated the following linear model of demand for online novels:
q = −60p + 950
where q is the monthly demand for OHaganBooks.com’s online novels at a price of p dollars per novel.
a. Use this model to express the monthly revenue as a function of the unit price p, and hence determine the price you should charge for a maximum monthly revenue.
b. Author royalties and copyright fees cost the company an average of $4 per novel, and the monthly cost of operating and maintaining the online publishing service amounts to $900 per month. Express the monthly profit P as a function of the unit price p, and hence determine the unit price you should charge for a maximum monthly profit. What is the resulting profit (or loss)?
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