Asked by Bentou Sanoe on Jul 21, 2024
Verified
A demand function for step stools manufactured by U-Step is q = -720p + 20,500.What is the revenue if the price per step stool is $18?
A) $369,000
B) $135,720
C) $28,040
D) $7,540
Demand Function
A mathematical formula representing the relationship between the quantity demanded of a good and its affecting factors such as price, income, and preferences.
Revenue
The income a business receives from selling a product.
- Understand the components that make up revenue equations and their reaction to price adjustments.
Verified Answer
KB
Khalid BashashyJul 26, 2024
Final Answer :
B
Explanation :
To find revenue, we need to multiply the price by the quantity sold. Given that the price is $18, we can substitute this into the demand function to find the quantity:
q = -720(18) + 20,500 = 7,540
Therefore, the revenue is:
R = p*q = 18*7,540 = $135,720
Option B is the correct choice.
q = -720(18) + 20,500 = 7,540
Therefore, the revenue is:
R = p*q = 18*7,540 = $135,720
Option B is the correct choice.
Learning Objectives
- Understand the components that make up revenue equations and their reaction to price adjustments.