Question

A corporation’s expense function is E = 7.50q + 34,000. The demand function was determined to be q = –5.5p + 6,000. Express the expense function in terms of the price, p.

Answer 1

To express the expense function in terms of the price, p, we can substitute the demand function into the expense function.

Given:

Expense function: E = 7.50q + 34,000

Demand function: q = -5.5p + 6,000

Substituting the demand function into the expense function:

E = 7.50(-5.5p + 6,000) + 34,000

Now, let's simplify the expression:

E = -41.25p + 45,000 + 34,000

E = -41.25p + 79,000

Therefore, the expense function expressed in terms of the price, p, is E = -41.25p + 79,000.