Question

When a company charges a price p dollars for one of its products, its revenue is given by Revenue = f(p) = 1000p (60-p). What is the revenue function?

A. Revenue = 1000p
B. Revenue = 60p
C. Revenue = 1000p - p^2
D. Revenue = 1000p + 60p

Answer 1

The revenue function is found by expanding the given expression to Revenue = 1000p (60-p), which simplifies to Revenue = 60000p - 1000p². The correct option for the revenue function is C. Revenue = 1000p - p².

Step-by-step explanation:

Total revenue is the income the firm generates from selling its products. We calculate it by multiplying the price of the product times the quantity of output sold:

Total Revenue = Price x Quantity

In this case, the revenue function is given by the equation Revenue = f(p) = 1000p (60-p). To simplify this expression, we can multiply the terms inside the brackets: Revenue = 1000p * 60 - 1000p². This gives us the revenue function as Revenue = 1000p - 1000p².