Problem

The price p (in dollars) and the quantity x sold of a certain product satisfy the demand equation x=5p+200. Answer parts (a) through (g).
(a) Find a model that expresses the revenue R as a function of p. (Remember, R=xp.)
R(p)=200p5p2
(Simplify your answer. Use integers or decimals for any numbers in the expression.)
(b) What is the domain of R ? Assume that R is nonnegative.
A. The domain is {p0p40}.
(Simplify your answers. Type integers or decimals.)
B. The domain is the set of all real numbers.
(c) What price p maximizes revenue?

Answer

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Answer

Final Answer: The price p that maximizes revenue is 20.

Steps

Step 1 :The price p (in dollars) and the quantity x sold of a certain product satisfy the demand equation x=5p+200. The revenue R is given by the product of the price and the quantity sold, i.e., R=xp.

Step 2 :Substituting the demand equation into the revenue equation, we get a model that expresses the revenue R as a function of p: R(p)=200p5p2.

Step 3 :The domain of R is the set of all prices p for which the revenue R is nonnegative. Since the quantity x sold cannot be negative, the price p cannot be less than 0 or greater than 40. Therefore, the domain of R is {p0p40}.

Step 4 :The revenue function is a quadratic function of the form R(p)=5p2+200p. The maximum value of a quadratic function f(x)=ax2+bx+c where a<0 is obtained at x=b/2a. In this case, a=5 and b=200.

Step 5 :Substituting a=5 and b=200 into the formula x=b/2a, we find that the price p that maximizes revenue is p=20.0.

Step 6 :Final Answer: The price p that maximizes revenue is 20.

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