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iren2701 [21]
3 years ago
13

Hercules Films is deciding on the price of the video release of its film Son of Frankenstein. Its marketing people estimate that

at a price of p dollars, it can sell a total of q = 220,000 − 11,000p copies. What price will bring in the greatest revenue? HINT [See Example 3.]
Business
1 answer:
kobusy [5.1K]3 years ago
7 0

Answer:

The price of 10 brings the greatest revenue or it is the price at which revenue is maximized.

Explanation:

The revenue is a function of Price multiplied by quantity. The revenue equation for the Hercules films is:

Revenue = Price * Quantity sold

Revenue = p * (220000 - 11000p)

Revenue = 220000p - 11000p²

We need to calculate the price at which revenue is maximized and as price changes, the quantity and revenue are changing. Thus we need to find the derivative of this equation to calculate the value of p.

d/dp = 1 * 220000p° - 2 * 11000p

Where p° = 1

0 = 220000 - 22000p

22000p = 220000

p = 220000 / 22000

p = 10

Thus p = 10 or price is 10 when revenue is mazimized.

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Answer: $5,000

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The Contribution margin ratio is;

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Given an increase of $30,000 in sales, increase in CM is;

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3 years ago
What is the difference between investing and saving
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In January 2020, Sunland Company, a newly formed company, issued 10300 shares of its $8 par common stock for $13 per share. On J
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Answer:

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Explanation:

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4 0
3 years ago
The production decisions of perfectly competitive firms follow one of the Ten Principles of Economics, which states that rationa
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Answer: d) think at the margin.

Explanation:

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According to the Ten principles of Economics,it is supposed that a rational person tends to think intelligently and would prefer to make minute changes in the resources while taking decision so that optimal rate can be maintained and additional action can be further thought.

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