The management of Lorimar Watch Company has determined that the daily marginal r
ID: 2851559 • Letter: T
Question
The management of Lorimar Watch Company has determined that the daily marginal revenue function associated with producing and selling their travel clocks is given by
R '(x) = -0.002x + 12
where x denotes the number of units produced and sold and R '(x) is measured in dollars/unit.
(a) Determine the revenue function R(x) associated with producing and selling these clocks.
R(x) =
(b) What is the demand equation that relates the wholesale unit price p with the quantity of travel clocks demanded?
p =
Explanation / Answer
Solution: Given R '(x) = -0.002x + 12
a)
R ' (x) = -0.002x + 12
R(x) = -0.002x^2/2 + 12x + C
R(x) = (-1/1000)x^2 + 12x + C
==========
b)
p(x) = R(x) / x
p(x) = ( (-1/1000)x^2 + 12x) / x + C
p(x) = (-1/1000)x + 12 + C
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