How To Find Revenue Function From Price Demand Function

Demand revenue cost profit demand function d q p d q in this function the input is q and output p q independent variable p dependent variable recall y f x p d q the price at which q units of the good can be sold unit price p most demand functions quadratic project 1 demand curve which is the graph of d q is generally downward sloping why.

How to find revenue function from price demand function. I m having a little bit of trouble figuring this out i found the price demand function in the previous question based on that i am supposed to find the revenue function. Solution or modeling the revenue function notice that the demand depends on the price of the product. 2 a business costs include the fixed cost of 5000 as well as the variable cost of 40 per bike. The price is given as a function of the number demanded.

I am a bit confused by the wording and what i should do. Then calculate f 4249 f 4250 and f 4251. R revenue p price per unit x number of units sold. R p x.

For low volumes there are few units to spread the fixed cost so the average cost is very high. Isn t this the revenue already based on the correlation between price and demand. However if the price is 70 dollars the demand is 5000. Graphs of revenue cost and profit functions for ice cream bar business at price of 1 50.

The demand function has the form y mx b where y is the price m is the slope and x is the quantity sold. To obtain the cost function add fixed cost and variable cost together. Profit income cost. P x r x c x marginal is rate of change of cost revenue or profit with the respect to the number of units.

Find the revenue function. The higher the price the less the demand. In this video we maximize the revenue from a linear demand function by. Revenue is equal to the number of units sold times the price per unit.

In the example the demand function sets the price of a quart of blueberries to be y 0 25x b. Essentially the average cost function is the variable cost per unit of 0 30 plus a portion of the fixed cost allocated across all units. Calculating the revenue function. You might think that the number purchased should be a function of the price input a price and find out how many items people will buy at that price but traditionally a demand function is done the other way around.

Profit function p x total income minus total cost. In this video we maximize the revenue from a linear demand function by finding the vertex of a quadratic function. To obtain the revenue function multiply the output level by the price function. The lower the price of course the higher the demand.

Cost function c x total cost of producing the units. This means differentiate the cost revenue or profit.