1. The market research department of the Better Baby Buggy Co. predicts that the

Question

1. The market research department of the Better Baby Buggy Co. predicts that the demand equation for its buggies is given by

q = 0.5p + 190

where q is the number of buggies it can sell in a month if the price is $p per buggy. At what price should it sell the buggies to get the largest revenue? HINT [See Example 3.]
p = $  

What is the largest monthly revenue?
$

2. Pack-Em-In Real Estate is building a new housing development. The more houses it builds, the less people will be willing to pay, due to the crowding and smaller lot sizes. In fact, if it builds 30 houses in this particular development, it can sell them for $520,000 each, but if it builds 70 houses, it will only be able to get $360,000 each. Obtain a linear demand equation. HINT [See Example 3.] (Let pbe the price of a house and q the number of houses.)

Determine how many houses Pack-Em-In should build to get the largest revenue.
houses

What is the largest possible revenue?
$

Explanation / Answer

question1)

q = 0.5p + 190

R=P*q

R= 0.5p^2 + 190p

maximize revenue R

R'= -P+190

R' = 0

P= 190 $

largest monthly revenue

R(190)= -0.5 (190)^2 +190*190

          =18050 $

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