We found that the marketing research department for the company that manufacture

Question

We found that the marketing research department for the company that manufactures and sells memory chips for microcomputers established the following price-demand and revenue functions: p(x)=75-4x PRICE-DEMAND FUNCTION R(x)=xp(x)=x(75-4x) REVENUE FUNCTION where p(x0 is the wholesale price in dollars at which x million chips can be sold, and R(x) is in millions of dollars. Both functions have domain 1<=x<=15 (A) Find the output that will produce the max revenue.___________millions chips(Integer or fraction) (B) What is max revenue? (C) What wholesale price per chip that produces the maximum revenue.

Explanation / Answer

The maximum revenue can be found by taking the derivative of the revenue equation, which would end up as 75-8x Setting this to 0 (where the slope is zero for the graph, which would indicate either a maximum or a minimum) gives us x=75/8 To test this, find the revenue of 0, the revenue of 75, and the revenue of 75/8. I know this, but you'll find that 75/8 is the maximum. To find the maximum revenue, plug in 75/8 into the revenue equation 351.5625 for the price, plug 75/8 into the price equation. 37.5

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