Exponential Functions and Models

label Mathematics
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schedule 1 Day
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You are planning to review the prices you charge clients for television ad development. You currently charge each client an hourly development fee of $2,800. With this pricing structure, the demand, measured by the # of contracts you signs per month, is 22 contracts. This is down 6 contracts from the figure last year, when your company charged only $2,200. 

On average,you bill  50 hrs of production time on each contract. Give a formal for total revenue obtained by charging $p per hour.

R(p) =

Jul 9th, 2015

Thank you for the opportunity to help you with your question!

Previous Contracts= 28 at price 2200

Present contracts = 22 at price 2800

Contracts vary inversely by a factor of k with the change in price

c=k/p

28= k/2200

k= 61,600

Hence at price p, c= 61,600/p

Revenue (p)= c*50 hours * p

=( 61,600/ p) *50*p

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 9th, 2015

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