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Weston Publishing publishes a deluxe edition and a standard edition of its English language dictionary. Weston's management estimates that the number of deluxe editions demanded is \(x\) copies/day and the number of standard editions demanded is \(y\) copies/day when the unit prices are $$\begin{array}{l}p=20-0.005 x-0.001 y \\\q=15-0.001 x-0.003 y\end{array}$$ dollars, respectively. a. Find the daily total revenue function \(R(x, y)\). b. Find the domain of the function \(R\).

Short Answer

Expert verified
The daily total revenue function is: \[R(x, y) = -0.005x^2 - 0.003y^2 - 0.002xy + 20x + 15y\] And the domain of the function R(x, y) is given by \((x, y) \in [0, 4000 - 200y] \times [0, 1500 - 3000y]\) where x and y are non-negative integers.

Step by step solution

01

Write the daily total revenue function

To find the daily total revenue function, we will multiply the unit price of the deluxe edition by the number of deluxe editions demanded and add this to the product of the unit price of the standard edition and the number of standard editions demanded. The price of a deluxe edition is given by \(p = 20 - 0.005x - 0.001y\), and the price of a standard edition is given by \(q = 15 - 0.001x - 0.003y\). Therefore, the daily total revenue function, R(x, y), can be expressed as: \[R(x, y) = xp + yq\] \[R(x, y) = x(20 - 0.005x - 0.001y) + y(15 - 0.001x - 0.003y)\]
02

Simplify the revenue function

Now we will simplify the revenue function by distributing x and y to the terms inside the brackets: \[R(x, y) = 20x - 0.005x^2 - 0.001xy + 15y - 0.001xy - 0.003y^2\] Combine the similar terms: \[R(x, y) = -0.005x^2 - 0.003y^2 - 0.002xy + 20x + 15y\] So, the daily total revenue function is: \[R(x, y) = -0.005x^2 - 0.003y^2 - 0.002xy + 20x + 15y\]
03

Determine the domain of the revenue function

To find the domain of the function R(x, y), we will determine the values of x and y for which both the price functions are non-negative. The prices are: \[p = 20 - 0.005x - 0.001y\] \[q = 15 - 0.001x - 0.003y\] We want \(p \geq 0\) and \(q \geq 0\), which can be expressed as: \(20 - 0.005x - 0.001y \geq 0\) \(15 - 0.001x - 0.003y \geq 0\) Now, we will find the ranges of x and y that satisfy these inequalities: From the first inequality: \(0.005x + 0.001y \leq 20\) \(x \leq 4000 - 200y\) From the second inequality: \(0.001x + 0.003y \leq 15\) \(x \leq 1500 - 3000y\) Since both x and y represent the number of copies demanded, they must be non-negative, so \(x \geq 0\) and \(y \geq 0\). Putting all these restrictions together, we have the domain for R(x, y): \[0 \leq x \leq 4000 - 200y\] \[0 \leq y \leq 1500 - 3000y\] So, the domain of the function R(x, y) is given by \((x, y) \in [0, 4000 - 200y] \times [0, 1500 - 3000y]\) where x and y are non-negative integers.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Demand Analysis
In the context of Weston's dictionaries, demand analysis involves finding out how many copies of the deluxe and standard editions are sold based on their prices. For the deluxe edition, the demand is denoted by the variable \(x\), and it follows the price equation \(p = 20 - 0.005x - 0.001y\). This equation shows that an increase in \(x\) or \(y\) leads to a decrease in the price \(p\). Similarly, the demand for the standard edition is denoted by \(y\), with the price equation \(q = 15 - 0.001x - 0.003y\). Here too, as the demand for either edition increases, the respective price decreases.Understanding these demand equations helps to predict how changes in the number of copies sold will affect prices. By analyzing such equations, businesses can strategize pricing to maximize revenues and meet demand under varying market conditions.
Price Elasticity
Price elasticity gives insight into how responsive the quantity demanded is to a change in price. For Western Publishing’s dictionaries, the elasticity informs us how sensitive consumers' demand for the deluxe and standard editions is to price changes. When we have equations like \(p = 20 - 0.005x - 0.001y\) and \(q = 15 - 0.001x - 0.003y\), we are dealing implicitly with elasticity. If a small change in \(x\) or \(y\) leads to a significant change in the price \(p\) or \(q\), it indicates a high elasticity.Elasticity assists Weston's managers in understanding the potential impact of raising or lowering prices. High elasticity suggests that price increases may reduce revenue, because consumers will react strongly, purchasing significantly fewer dictionaries. Conversely, low elasticity indicates that consumers are less sensitive to price changes, so revenue might be more stable with price adjustments.
Domain of Functions
The domain of the revenue function \(R(x,y)\) outlines the possible values for \(x\) and \(y\) – the numbers of deluxe and standard editions that can be sold under the given constraints where prices remain non-negative. In this scenario, to maintain prices \(p \geq 0\) and \(q \geq 0\), constraints are derived from inequalities:
  • For \(p\): \(20 - 0.005x - 0.001y \geq 0\)
  • For \(q\): \(15 - 0.001x - 0.003y \geq 0\)
From these inequalities, the constraints translate into tangible limits:
  • \( 0 \leq x \leq 4000 - 200y \)
  • \( 0 \leq y \leq 1500 - 3000x \)
The region defined by these constraints enables Weston's management to gauge how changes in demand patterns adjust the production boundaries efficiently while ensuring that the prices stay feasible, ultimately aiding in financial planning and production strategies.

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