The revenue is produced by the product of pricing and demand: Sky Eagle's revenue function is RS = 229 PS - 0.60 PS2 + 0.35 PSPH, while Horizon's revenue function is RH = 269 PS + 0.10 PSPH - 0.64 PS2.
<h3>Where does the maximum amount of revenue occur?</h3>
The point at which revenue is maximized is when marginal revenue is equal to 0. It happens in our situation when the 6 qty are sold. At this moment, total revenue is likewise high. After this moment, even if the quantity sold is increased, the revenue will not be at its highest.
The variables mentioned are;
DS = 229 - 0.60 PS + 0.35 PH is the demand function for the Sky Eagle.
The DH = 269 + 0.10 PS - 0.64 PH demand function for the Horizon
The quantity demanded is given by the aforementioned demand functions: Consequently, the following is the revenue function, which is obtained by multiplying the price by the demand function:
RS = PS * DS = PS * (229 - 0.60·PS + 0.35·PH) is equal to 229·PS - 0.60·PS² + 0.35·PS·PH
The revenue for Sky Eagle RS is calculated as follows: 229PS - 0.60PS2 + 0.35PSPH; Following are the revenue figures for Horizon:
The maximize revenue for Horizon, RH = 269·PH + 0.10·PS·PH - 0.64·PH².
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