You Have Been Hired as a Marketing Consultant to Johannesburg

Multiple Choice

You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize weekly revenue. To make life as simple as possible, you assume that the demand equation for Johannesburg hamburgers has the linear form where p is the price per hamburger, q is the demand in weekly sales, and m and b constants are certain constants you must determine. Your market studies reveal the following sales figures: when the price is set at $4 per hamburger, the sales amount to 4,560 per week, but when the price is set at $7 per hamburger, the sales drop to zero. Now estimate the unit price in order to maximize annual revenue and predict what the weekly revenue will be at that price.

A) p = $3.50, R = $5,320.00
B) p = $6.50, R = $4,940.00
C) p = $4.50, R = $17,100.00
D) p = $3.50, R = $18,620.00
E) p = $5.50, R = $12,540.00