You Have Been Hired as a Marketing Consultant to Johannesburg

question 77

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

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Definitions:

Money Demand Curve

A graphical representation showing the relationship between the quantity of money people want to hold and the interest rate, at a given point in time.

Real GDP

Real GDP, or Real Gross Domestic Product, measures an economy's total output adjusted for inflation, providing a more accurate picture of an economy's size and growth.

Interest Rate

Interest rate is the percentage charged or paid for the use of money, typically expressed as an annual percentage of the principal.

Real GDP

Real GDP, or real gross domestic product, measures a country's total economic output, adjusted for price changes or inflation.