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11. Monthly sales revenue, S (in $), and monthly advertising expenditure, A (in $), are modelled by the linear relation, S = 9000 + 12A.
(a) If the firm does not spend any money on advertising, what is the expected sales revenue that month?
(b) If the firm spends $800 on advertising one month, what is the expected sales revenue?
(c) How much does the firm need to spend on advertising to achieve monthly sales revenue of $15 000?
(d) If the firm increases monthly expenditure on advertising by $1, what is the corres- ponding increase in sales revenue?

Help me!

Sagot :

Adioabiolaidn

We are required to find the expected sales revenue of the month

The answers are given below

S = $9000

S = $18,600

A = $500

S = 15,012

Given:

S = 9000 + 12A

Where,

S = Monthly sales revenue

A = monthly advertising expenditure

a. If the firm does not spend on advertisement

S = 9000 + 12A

Where,

A = 0

S = 9000 + 12A

S = 9000 + 12(0)

S = $9000

b. If the firm spends $800 on advertising one month

S = 9000 + 12A

= 9000 + 12(800)

= 9000 + 9600

= 18,600

S = $18,600

c. S = 9000 + 12A

When

S = $15,000

15,000 = 9000 + 12A

15000 - 9000 = 12A

6000 = 12A

A = 6000/12

= 500

A = $500

d. If the firm increases monthly expenditure on advertising by $1

If A increases to $501

S = 9000 + 12A

= 9000 + 12(501)

= 9000 + 6,012

= 15,012

S increases to $15,012

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