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) = 125-4x R(x) = xp(x)=x(125-4x) where p(x) Is the wholesale price in dollars at which x million chips can be sold, and R(x) Is in millilons of dollars. Both functions have domain 1SxS25. (A) Which of the following is the graph of the revenue function? O A. Price-demand function Revenue function ?B. O c. -2004N 5 1015 20 -800 0 5 1015 20 -20-15-10-50

Explanation / Answer

If you observe,values of x from 1 to 25 are positive and in this domain, R(x) is also positive for the given values of x from 1 to 25 (( if x=1 then R(x) = 1(125-4(1)) = 121 and if x =5 then R(x) = 5(125-4(5)) =525 and if x=10 then R(x) = 10(125-4(10)) = 850 and if x = 15 then R(x) = 15(125-4(15)) = 975 and when x = 25 then R(x) = 25(125-4(25)) = 625 this means that R(x) must be positive for the given x values))

By this logic and values of R(x) cross checked with option A, option A is the answer because in option B,R(x) is shown on negative y axis and in option C, values of x are shown on negative x axis, both of which are not possible since R(x) and x are positive.

Therefore the correct graph is option A

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