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A company earns s dollars by selling y items a week?

User Ram Rachum
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Final answer:

The student's question involves understanding the revenue equation where a company's earnings depend on the number of items sold. Example scenarios illustrate how wages and pricing affect and are affected by the company's revenue generation, thereby highlighting a key business principle.

Step-by-step explanation:

The question refers to a linear relationship between the amount of revenue a company earns (s) and the number of items sold (y) in a week. Taking an example, if a worker produces two widgets per hour, and each widget is sold for $4, the worker contributes $8 in revenue per hour to the company. For a company, it is critical to pay the worker proportionately to this generated revenue up to a maximum of $8/hour to maintain profit-maximization. Essentially, this illustrates the company's revenue function, where each widget contributes to the total income based on the selling price.

Furthermore, in a broader business context, the revenue generated from sales dictates wage limits and helps in determining the appropriate pricing strategies that ensure business profitability. For instance, a t-shirt company named Coolshirts selling t-shirts at $9 each will have a different revenue outcome compared with the widget example, depending on the quantity sold.

User Bhoomi Jagani
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