You Have Been Hired as a Marketing Consultant to Big

Multiple Choice

You have been hired as a marketing consultant to Big Book Publishing, Inc., and you have been approached to determine the best price for the hit calculus text by Whiner and Istanbul entitled Fun with Derivatives. You decide to make life easy and assume that the demand equation for Fun with Derivatives has the linear form where p is the price per book, q is the demand in annual sales, and m and b constants are certain constants you ll have to figure out. Your market studies reveal the following sales figures: when the price is set at $11 per book, the sales amount to 48,440 per year, when the price is set at $67 per book, the sales drop to 32,760 per year. Now estimate the unit price in order to maximize annual revenue and predict what Big Book Publishing s annual revenue will be at that price.

A) p = $69, R = $236,992
B) p = $268, R = $51,520
C) p = $82, R = $2,369,920
D) p = $92, R = $2,369,920
E) p = $128, R = $1,184,960