You Have Been Hired as a Marketing Consultant to Johannesburg $q = m p + b$

question 36

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
$q = m p + b$
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 1,420 per week, but when the price is set at $5 per hamburger, the sales drop to zero. Use these data to calculate the demand equation.

• A) \(q = 1,420 p + 8,520\)
• B) \(q = - 1,420 p + 5,680\)
• C) \(q = - 1,420 p\)
• D) \(q = - 1,420 p + 7,100\)
• E) \(q = 1,420 p - 7,100\)

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Definitions:

Equity Method

An accounting technique used by firms to assess the profits earned from their investments in other companies, by reporting these profits proportional to their ownership percentage.

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Significant Influence

Refers to the power to participate in the financial and operating policy decisions of another entity, without having full control over it.

Common Stock

It represents shares of ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.